How the Greek food industry is squaring up to austerity
The food industry is the biggest manufacturing sector in the Greece. It employs more than 26 per cent of the workforce in the manufacturing sector as a whole, and generates 22 per cent of revenue. In 2008 it ratcheted up €12.1bn in sales, a 5.2% on the previous year.
But Greece is now in the midst of a debt crisis. While the national government is implementing tough new tax and salary measures, the EU and the IMF have agreed to a €110bn financing package over the next 3 years.
So how will this affect the food sector?
“We know it’s going to be a difficult year even though food is not a luxury but a necessity,” Evangelos Kaloussis, president of the Federation of Hellenic Food Industries told FoodNavigator.com.
Consumers were already feeling uncertain about their income as a result of the economic situation, and the new government measures, which involve new taxes and salary and pension reductions, add to this.
Nonetheless, Kaloussis expects food industry growth in 2010 to be between 0% and -5%, a drop off from the 2007-8 rate but still far better than the grim predictions for the car and building industries, which are looking at -25% to -40% growth this year.
But to bring prosperity back to Greece, fiscal measures that reduce cost and increase revenues of the public sector are not enough, according to Kaloussis.
“It is vital to continue producing services and products, to maintain investments, to create new jobs. The Greek food industry is a modern and dynamic industry that has invested a lot in the past years both in equipment and human resources,” he said.
“We believe that with the right strategies and continuous effort, we will contribute to the development efforts of Greece.”
Those strategies should involve keeping quality and safety of products a priority, as well as continuous monitoring of all cost elements so as to offer the best prices to consumers – and not letting up over innovation even in difficult times.
According to the latest data from the CIAA (from 2008 or latest available), food and non-alcoholic beverages account for around 17% of household expenditure in Greece. This is in the middle of the scale for member states, with Romanian consumers at one end spending 27% of household income on food and drink, and Luxembourg consumers at the other end spending 8%.
Between 2008 and 2009 consumer price inflation was up more than 2 points, but there was 1% deflation in food prices according to Eurostat’s Harmonised Indices of Consumer Prices.