ECONOMY

The government and the Gordian knot of competition

The Greek market is evidently living through the traumatic experience of the transition from the era of unaccountability to that of mature, European-type business activity that is subject to rules. The Competition Commission’s recent efforts to promote the smooth functioning of the market, with its report on the fresh-milk cartel and its much less bold recommendations for the fuels market, are part of this transition period. The truth is that the Greek market is problematic in nearly all areas. In fact, it is subject to the usual ailments characteristic of the Greek state: a multiplicity of laws, an absence of effective controls, entangled interests and corruption. In his single press briefing since assuming office, the Competition Commission’s president, Spyros Zisimopoulos, was quite to the point. «Competition is absent from the Greek market,» he said, adding, however, that he was optimistic that the situation would soon improve. Indeed, he hired more – and badly needed – people and the two aforesaid issues they tackled caused concern among many businesspeople monopolizing their respective sectors. Nevertheless, the volume of the problems is such that it does not allow for optimism or worry among the dominant players. The reference to «distortions» in the fuels market (instead of «cartel,» the proper term) confirms the above conclusion. The measures proposed are either skin-deep (such as allowing supermarkets to sell gas), or difficult to implement, such as freeing imports which would require legal changes. On the flip side of the coin, everyone knows that all fuels in the country are refined by just two big groups and that consumer prices have minimal differences. The similar cases of abuses of dominant market positions and cartels to be explored in other sectors are many. Cement is a good example. Many also consider that bank charges result from harmonized practices, as they are almost identical. Another example is the beer market, where one company dominates, and in frozen food, where one group accounts for 70 percent of the market. The detergents market raises questions because just two groups produce the main bulk as well as in terms of pricing. The same goes for a series of personal-care products, such as shampoos. Even the relatively small market of foreign-language books has competition problems, as only a few publishers venture here. Characteristic of the size of the problem of the general lack of competition is the fact that the Competition Commission has about 250 cases in its drawers, waiting for someone to open them. For this reason, in this sensitive transitional phase, where the Competition Commission has only just began stirring the stagnant waters of vested interests, if the government wishes to help, it had better abstain from the issue altogether. The absence of even a single «explanatory» statement from government officials would be preferred for citizens and consumers, those who stand to benefit from effective market competition.