Companies plan price cuts for range of foods
One after the other, major food companies are being forced to either introduce very small price increases, lower than the rate of inflation, or even reduce prices, as the economic crisis increasingly hits sales of food as well as other everyday commodities. This is likely to be reflected in January’s consumer price index, which is expected to fall below 2 percent for the first time. There are even some cases of companies that had planned significant price hikes and had submitted them to the Development Ministry, which are now canceling them under pressure from both the ministry (whenever rises cannot be justified by cost data) and by the market, as competition in the food sector becomes increasingly tough. One such case is that of a top olive oil company which had planned a number of sizable price increases. But now that producer prices have fallen to particularly low levels – 2 euros per liter – and its main competitor is preparing to reduce prices by up to 8 percent, according to sources, those hikes have been shelved. In much the same way, a major refreshments and juice company has decided against price rises for juices that would have reached up to 7 percent. The same firm is about to launch a promotion campaign and even cut prices for cola products, irrespective of its very large market share. The main reason for this appears to be the aggressive pricing policy of its main competitor, which is set to continue for the whole of 2009. A senior official at the latter company told Kathimerini that «the economic crisis is accelerating the implementation of aggressive pricing policies.» A well-known dairy company based in Thessaly is also preparing to cut its prices and this will probably have a snowball effect for all other major dairy firms. Cheese prices are likely to see cuts of 3 to 4 percent in the next few weeks, while price rises in yogurt planned by one leading manufacturer will now be around the inflation rate. The Development Ministry is meanwhile making efforts to secure a reduction in the price of flour, as this would mean lower prices for many products including bread, with one company planning a 20 percent decrease for 200 products.
