In an official decree, Greece’s Ministry of Development has announced fines of €1 million each on Unilever and Procter & Gamble. The penalties were imposed due to the violation of gross margin cap regulations spanning over one hundred product codes. These include various goods such as detergents, household cleaners, and personal hygiene products.
The fines follow an initiative undertaken by Minister Kostas Skrekas to confront the persistent challenge of inflation within the country. Investigations into five other multinational corporations in the food industry are nearing completion, Greek media report.
Unilever’s Response to Greece’s Fine
Unilever has formally contested Greece’s imposed €1 million fine, objecting to the method employed for its computation. Disputing the verdict’s provisional nature, the company has expressed intentions to appeal to the Council of State. Unilever argued that most production costs didn’t affect consumers, impacting profits negatively. However, the ministry swiftly dismissed the company’s objection within three hours of their five-day response time.
Issuing a statement, Unilever expressed discontent with the fine calculation, pledging to join the “permanent price reduction” initiative. The initiative will cover more than eighty product codes, offering reductions of five percent or more for at least six months.
Company insiders have questioned the provisional nature of the decision, citing a disparity in response time provided to Unilever compared to that of another multinational entity. According to Greek media, other multinationals may appeal to the Council of State, indicating dissatisfaction with operations in Greece. There have also reportedly been warnings about a potential withdrawal of investment from the country.
Skyrocketed Prices for Olive Oil
One of the main products affected by the recent rapid increase in price was olive oil. The increase has turned it into a luxury item, with wholesale prices at around €8.40 per liter. This surge is due to decreased production in various Mediterranean countries, particularly in Spain, Greece, and Italy.
Reasons behind the rise reportedly include high VAT, adverse weather conditions, high production costs, and profiteering. Greek authorities were criticized for failing to anticipate the production decline, unlike Turkey, which restricted exports.
The International Olive Council highlights Greece and Italy as the second and third largest producers, respectively. Spain’s production plummeted by over fifty percent due to drought and heat.
Consequently, prices soared to €8.45 per kg, leading some Greek supermarkets to employ security measures against theft. Argophilia reported incidents of olive oil theft in Cretan villages, amounting to hundreds of liters in just twenty-four hours. Thieves are motivated by the high value of olive oil, often attempting to sell it as their own.