Ministry urges dairy firms to ‘help’ lower milk prices on Wednesday
A meeting on lowering milk prices between Deputy Development Minister Gerassimos Giakoumatos, retailers and dairy industry representatives ended on Wednesday, with one ministry source confident that dairy companies will soon be issuing press releases to announce a 5-pct reduction in prices.
“Milk is not expensive but since measures were taken and the price did not fall, we must all show our social responsibility to the people,” Giakoumatos said after the meeting. Senior ministry officials also stressed that the need for initiatives to lower prices was “self evident” for all companies that “understand their role in the framework of Corporate Social Responsibility”.
During the meeting, the ministry said it was seeking solutions to improve the functioning of competition on the market in order to lower prices, such as changes to the distribution system and “dynamic” pricing.
It also urged market players to “invest in the confidence of Greek consumers” and welcomed an announcement by a dairy firm on Tuesday night that it will lower the price of one of its milk products by 0.05 euros, forecasting that this move will be copied by other dairy firms and the retail trade.
Regarding VAT for milk and other basic food products, Giakoumatos underlined that VAT in Greece was already high in comparison with other EU countries, such as the United Kingdom, but did not clarify whether it would be reduced.
Dairy firm representatives, on their part, appeared unwilling to consider a cut in prices, stressing that the recent reforms in the milk market did not reflect market needs or support domestic production.
“When the state itself increases the cost through taxation, it cannot then ask companies to lower their prices,” one source said. According to figures presented by the local dairy companies, since the measures extending the shelf life of milk were passed, milk imports had increased by at least 5 pct and this had put pressure on domestic production and led to an increase in producer prices of at least 0.02 euros per litre.