BMI's Executive Summary

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Greece was hit by two price fixing scandals in 2007 which have increased public distrust of large organisations and raised the perception that rising prices in the food and drink sector are the result of producers collaborating to form price fixing cartels. This news follows the arrest in 2006 of Panayotis Adamopoulos, the director of the Hellenic Competition Commission, who was charged with attempting to extract a EUR2.5 million bribe from MEVGAL, a major dairy firm which was being investigated over price fixing allegations. Greece is currently ranked the most corrupt country in the 15-eurozone area by global anti-corruption watchdog Transparency International.

In December after a year-long investigation the Greek competition authority imposed fines of EUR48.3mn (US$71.0mn) on seven dairy processors for fixing the prices paid to dairy farmers. This was quickly followed by further fines totalling EUR28.6mn (US$42.0mn) for four dairy companies and six supermarkets for fixing the retail prices of dairy products. These latest revelations have added to widespread public distrust of large organisations and a growing perception among the local population that a large number of Greek companies operate price-fixing cartels. This has been the centre of public debate and the focus of newspaper campaigns as rising costs of living and inflationary pressures are already putting a squeeze on consumers.

Greece's largest food and drink company Vivartia, which has interests in dairy, baked and frozen products was hit with a fine of EUR21.8mn (US$32.0) for its part in the price fixing scandal and is one of the focal points of the public's rising objection to large companies. Vivartia's position is not helped by the fact that it is controlled by foreign owners, having been bought in the summer of 2007 by the Marfin Investment Group (MIG) which itself is owned by the Dubai Investment Group (DIG), a global financial investment vehicle of the Dubai government. MIG has been the focus of concern in Greece, where any company consolidation is generally viewed with suspicion – an understandable sentiment following the recent price fixing revelations. Sections of the Greek population are also concerned that such a large and strategic company is controlled by foreign owners – a sentiment which has forced MIG to stress its Greek connections, running full-page adverts in the local media under the motto MIG - Made In Greece.

Rising public distrust of large organisations is bad news for an increasingly mature food and drink sector. Any company that wishes to flourish in a mature market needs to have the backing of the general public and price fixing is one of the most objectionable activities for a population which is already struggling to cope with rising food inflation. In BMI's opinion this sort of activity not only harms the company's involved but also damages the reputation and prospects of all large food and drink firms operating in Greece.

Contents

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Chapter 1 – Business Environment

Retail Business Environment Rankings

Table: Central And Eastern Europe Business Environment Rankings

SWOT Analysis

Greece Food & Drink Industry SWOT

Greece Political SWOT

Greece Economic SWOT

Greece Business Environment SWOT

Macroeconomic Outlook

Table: Economic Growth

Chapter 2 – Retail

Plenty Of Potential For Private Labels In CEE

Table: PL Market Share Within Overall Food And Drink Retail Sales, 2006, Selected CEE Countries

Table: Leading CEE Retailers By PL Market Share

Industry Forecast Scenario

Table: Greece MGR Value Sales By Format – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview – Greece

Table: Structure Of The MGR Market By Number Of Outlets

Table: Structure Of The Greek MGR Market By Value (US$mn)

Chapter 3 – Food & Drink

CEE Food Focus: Fittest Fight For Future Of CEE Dairy Market

Table: EU Allocation Of Milk Quotas To 2004 Accession Countries In The CEE (1,000 Tonnes)

Industry Forecast Scenario

Food

Table: Greece Food Consumption Indicators – Historical Data & Forecasts

Canned Food & Confectionery

Table: Value/Volume Sales Of Canned Food & Confectionery – Historical Data & Forecasts

Drinks

Table: Greece Beverage Sectors Value/Volume Sales – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview – Greece

Table: Greece Agricultural Sub-Sector Volume Production – Historical Data

Chapter 4 – Tobacco

Industry Forecast Scenario

Table: Cigarette Value/Volume Sales – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Chapter 5 – Competitive Landscape

Key Players

Table Key Players In Greece’s MGR Sector 2005

Table: Key Players In Greece’s Food & Drink Sector

Regional Company Case Studies

Mercator – CEE Case Study

Financial Highlights

Table: Mercator’s Financial Highlights

The Only Way Is Up…

Current Position

Table: Mercator’s Market Share Growth To 2005

Covering All The Bases

The Importance Of Private Label

Future Position And Growth Strategies

Table: Projected Growth In Market Share, According To Company Strategy, 2005-2010

Group Diageo – CEE Case Study

Table: Brand Performance – Europe, Year Ending June 30 2006

Table: Diageo: Distribution In The CEE

Groupe Danone – CEE Case Study

Groupe Danone – The CEE Figures

Table: Key Figures By Business Line

Table: Key Figures Over Five Years, Fresh Dairy Products (EURmn)

Metro – CEE Case Study

Table: Metro’s Presence In CEE

Table: Development Of Group Sales And Divisional Sales As Well As Regional Sales

Company Monitor

J. Boutaris & Sons Holding S.A.

Carrefour Marinopoulos

Atlantic Supermarket SA

Alpha-Beta Vassilopoulos SA

Fage Dairy Industry SA

Athenian Brewery SA

Delta Holdings

Chipita International SA

Vivartia/BrandCo

BMI Forecast Modelling

How We Generate Our Industry Forecasts

Retail Industry

Sources

Competitive Landscape for Europe Food & Drink Reports: Sample of  
Companies Ranked

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At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of European Food Sources

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BMI's European Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: