ECONOMY

Consumers brace for more hikes

The prices of food items such as bread and meat are set to rise in the next few weeks due to the increase in the global prices of raw materials such as wheat and sugar as well as the continuous shifts in value-added tax rates in Greece. Among the factors pushing prices higher, despite the recession in the economy and the drop in demand, is the increase in the cost of electricity and fuel. Despite last week’s strong statement by Deputy Minister of Regional Development and Competitiveness Dinos Rovlias that the price of bread would not rise, its hike seems inevitable. Andreas Christou, president of the Athens Bakers’ Association, said that the price of flour per 50-kilo bag is about 25-26 euros today, up from less than 20 euros a year ago. He added that the repeated hikes in VAT and the cost of fuel have rendered price increases essential. «It is hard to go ahead with an increase in the price of bread when we see consumer incomes shrinking and the number of unemployed growing. But on the other hand we have absorbed so many VAT hikes and increases in the price of flour that we are now exhausted. It is no coincidence that in the 2009-10 period some 50 bakeries closed down in Athens, while in the past they would change hands,» Christou said. According to data compiled by the International Grains Council (IGC), the export price of wheat in Rouen, France, came to $347 per ton on January 14, up from $334/ton on January 7 and $181/ton a year earlier. The increase in the price of grain will have a domino effect on the price of animal food, which in turn will see prices rise for dairy products. There are also worries about the international price of sugar. The latest data released by the Hellenic Statistical Authority (ELSTAT), concerning December 2010, showed the price of meat posting a 1.5 percent increase from a year earlier, diary products and eggs gaining 1.6 percent, vegetables climbing by 8.8 percent, fresh fish by 5.2 percent and sweets getting more expensive by 3.6 percent on an annual basis, in the face of the recession. The consumer price index for food grew 1.9 percent in Greece annually last month, according to Eurostat, against a 1.8 percent rise in the eurozone.