ECONOMY

Battle for milk market share

As the biggest milk producers are being investigated over price-fixing allegations, smaller firms hope they can increase their market share by adding more sales points. Agno, a former cooperative near Thessaloniki that was almost wiped out a few years ago, has now ensured its market presence through a deal with supermarket chain Veropoulos. Other small producers that have found a market niche are Evol, a company based in Volos, central Greece, Cretalat and Koukakis, based in Kilkis, north of Thessaloniki. The increasing availability of private label milk has helped bring down the price of a 1-liter carton to below 1 euro. Private label milk is selling for as low as 85 cents. However, the big firms (Delta, Olympos, FAGE, Friesland and Mevgal) still keep their prices high, from 1.21 to 1.47 euros. They follow a different policy from the 1990s, when they aggressively cut prices in order to drive smaller-sized competitors from the market. In some cases, it worked. But, those small producers who survived have managed to retain and even expand their market share: In 2001, the top 10 firms controlled 80.3 percent of the market, while in 2004 their share dropped to 77.4 percent. Now, in some cases, we see the big milk producers turning on each other. Last year, for example, Delta’s subsidiary Vigla produced the so-called «authentic Olympus milk» in a barely disguised attempt to lure customers from Olympos, the newest addition to the club of big milk producers. At the same time, it wrote to the Ministry of Development demanding that Olympos stop using the name because it implied that its production came from the Mt Olympus area, which, it said, was not true. In reply, Olympos demanded that Delta stop using the name Olympus in Thessaly.