Greece’s High Prices for Supermarket Products
A recent study conducted by the Bank of Greece has revealed that Greece continues to be one of the most expensive countries in the eurozone for branded standard supermarket products. The study found that the price differences can reach up to 129% for carbonated water and 56% for long-life UHT milk.
Factors Contributing to High Prices
Producers and retailers are identified as key factors responsible for the high prices, with consumer habits also playing a role. The researchers point out that competition among producers, market concentration among retailers, and consumer habits all contribute significantly to the price differences between countries. BoG governor, Yannis Stournaras, has even mentioned the presence of oligopolies in the food market as a contributing factor.
Potential Solutions
The researchers suggest that by simulating the structure of the Greek market and consumer behavior to match those in the eurozone, price differentials could potentially be reduced by 17 percentage points for products with the highest sales. This could help alleviate the burden on consumers and make supermarket products more affordable in Greece.
Improving Competition in the Retail Market
A recent study suggests that there is room for improvement in the retail market, particularly in increasing competition between producers and bringing about changes in market structure. The study also emphasizes the importance of enhancing consumer literacy in the long term.
Consumer Preferences and Pricing
Consumers in Greece tend to prefer branded products and smaller packages, which is believed to have a significant impact on prices compared to other European countries. In 2023, Greece was found to be 10% more expensive than the eurozone average across 41 branded product categories, positioning it as one of the pricier countries in the region.
While there has been some improvement since 2011 when Greece was 19% more expensive, other countries like Ireland have narrowed the gap significantly. For instance, Ireland reduced its price difference from 26% in 2011 to just 2% in 2023. On the other hand, countries like France and Germany continue to offer prices below the eurozone average, standing at 93% and 98%, respectively.
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