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Greek Dairy Companies Keep Prices High

While Greeks have had their pay cut, taxes hiked and pensions slashed during a crushing economic crisis, the country’s dairy companies, accused by critics of operating in a cartel-like manner, haven’t lowered their prices for a product that’s a necessity for many people and families.
Reuters reported that while dairy farmers are paid 45 euro centers per liter for what they produce, that giant companies who buy it from them mark it up two to three times higher. Stathas Aravanis, one framer, told the news agency that farmers are barely getting by and the government makes it difficult for them to expand. “If the price fell to 40 cents none of us would be able to survive. We are barely getting by at these prices,” he said.
Aravanis reserves his harshest criticism for government bureaucrats, who he says make it hard for farmers to obtain land permits to expand and reap economies of scale. “It’s not as if cows are going to be grazing in their living room,” he said.
George Kefalas, who produces milk on a family farm near the northern city of Thessaloniki, said it can take two or three years to get an operating license. “In other countries, even in the developing world, these are issues that were resolved decades ago,” Kefalas, the head of Greece’s Cattle Breeders’ Association, said. He says he supplies milk to the dairy firm Olympus at 46 cents a litre.
Agnes Papadopoulou, 46, a mother of two young children who lost her job as an accountant in January, stopped buying fresh milk months ago because she could no longer afford it. “It’s too expensive. It’s impossible to get by when you need two litres a day, plus bread, plus food, never mind all the bills and taxes we have to pay. Fresh milk is a luxury,” Papadopoulou said,
The European Union’s statistics agency Eurostat says the price in Greece of dairy produce – milk, cheese and eggs – was 31.5 percent above the EU average in 2011, the highest in Europe. Greek dairy firms, such as Delta and Olympus, say they charge a fair price and their sector is one of the least profitable due to high costs.
But many Greeks assume that milk prices are rigged, a suspicion reinforced by a fine of 75 million euros that the Competition Commission slapped on several firms in 2007 for fixing prices between themselves and with supermarkets. The companies are still challenging the ruling in court, but they haven’t lowered their prices.

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