Accuracy: Measures and how they threaten supermarket-supplier relationships – 2024-03-13 13:00:15

The fragile “peace” that prevails between suppliers and supermarkets threatens to be blown up by the government’s measures for precision with the prospect of extending the mandatory “haircut” of 30% of benefits-discounts to the food category as well, while representatives of the market express strong skepticism and dissatisfaction with the size and time depth of government interventions.

Uncharted waters

Already two weeks after the implementation of government regulations against punctuality the relationship of the two sides, suppliers and retailersis at a pivotal point, as the context of the negotiations has changed drastically, waiting in “uncharted waters” to see how the consumer will behave.

Tension from government intervention

On the sidelines of the 29th General Assembly of Efficient Consumer Response (ECR Hellas) with 130 members from industry and retail, representing a total turnover of 18 billion euros, market executives commented that any intervention in food would create tension in supplier-retailer agreements , with the latter seeking to preserve their profit margins, which in relation to the industry move at a much lower level.

This is because in food the offers and promotions are limited in terms of their frequency, but also limited in terms of discount rates. In this light, if there are new data in the pricing with government intervention and in the food categories the risk of causing strong tremors in the market is visible.

It is recalled that the measure to reduce the initial price, which must be equal to at least 30% of the sum of the discounts, credits and other benefits made by the industry in order to achieve a corresponding transfer to the final prices, is applied (for now?) to detergents, cleaning products and household and personal care items.

Dissatisfaction is intense

At the same time, strong dissatisfaction is expressed towards the interventionism of the Ministry of Development’s measures.

Speaking from the floor of the General Assembly, the general manager of the Union of Supermarkets of Greece, Mr. Apostolos Petalas.

Income crisis

Among other things, he stated that: “Over the past 15 years the Western economy has gone through one huge economic crisis, after another pandemicthen one energy crisis and now inflation and interest rates. But Greece has a difference. He went through something that even now in no part of the western world they can realize that he went through: one bankruptcy which led to an income crisis, which led to a great deal of uncertainty. Greek society is experiencing this uncertainty today, not like other societies that didn’t have it income crisis”.

Communicative populism and interventionism

“Today the average income in Greece is either from work either from pension either from freelancing never had such a distance from the European average. When we entered the euro it was at 70%, it reached 90% in 2009 before the system collapsed and today it is at 56%. All this created a mixture that has seduced many in Greece and especially our politicians, who, perceiving all this and measuring everyday life, actually give in quite a bit to communicative populism and especially as far as we are concerned to interventionism”.

Unprecedented government interventions

“The interventions that have been made, are being made and are being considered are unprecedented. In this way, of course, no problem is solved because the problem has much more radical bases and is not Greek, it simply moves back the hope of improving things and we have seen many concepts that harm each of us e.g. greed inflation, profiteering, the evil multinationals and the banana. As you understand, they create a great suspicion towards entrepreneurship and especially towards our own industries. Every time we face the pressure from the various stake holders and of course also from inflation, I would say that one of the options we have – and this with a measure – is the revaluations we make on the products. But this creates a bigger problem than it solves. Ultimately, a balance should be found between efficiency, productivity, digital transformation, business transformation and with a measure of appreciation so that the society we live in can bear it.”

It should be noted that in the last three and a half years, more than 25 pieces of legislation (laws or ministerial decisions) have been recorded which regulate the market in one way or another, such as the household basket, products with a permanent price reduction, the ceiling on the gross profit margin and now the new anti-bidding measures.

Source: ot.gr