Posts Tagged 'food'

Made in Greece

Illustration by Manos Symeonakis


By Harry van Versendaal

In a white, minimalist bedroom, a man in boxer shorts is getting dressed. His sated partner lies in bed. The door opens, and an older, besuited man walks in. Calmly, the woman introduces her lover, and her husband promptly asks him to lunch. And then the slogan flashes on the screen: “We Greeks aren’t like this — why should our furniture be?”

As Greece tries to deal with a contracting economy and sky-high unemployment, local businesses are trying to gain an advantage over the competition by advertising their Greek credentials. This commercial for Neoset furniture, poking fun at the local company’s bigger Swedish rival, is only one of many new ads popping up on the radio, television and in the press that are pitching the Buy Greek message.

“Despite Neoset being a Greek company that has worked in the sector for over 30 years, it’s the first time it has ever come out so strongly in advertising its products’ provenance,” the company’s retail marketing coordinator, Marita Kazadelli, said in a recent interview.

“As a company, but also as consumers, we want to support Greek companies and Greek products, so in this way we show our support for Greek businesses, Greek exports, Greek workers and all the rest,” she said.

A whole variety of businesses from travel agents to the fashion industry are catching the trend.

One of these is Helmi, a Greek company that makes edgy clothes for women who until now, its officials admit, had let consumers think it was not local.

“For years our customers considered us a foreign company, an assumption which… we never tried to correct. Now, however, we are letting our consumers know that this supposedly foreign brand is actually Greek,” Helmi CEO Dimosthenis Helmis said.

A radio ad by Bic, the France-based company specializing in the manufacturing of stationery products, lighters and razors, claims that 97 percent of the company’s disposable razors are manufactured in Greece. Around 860 million razors were manufactured in Bic’s factory near Athens last year, 90 percent of which were exported to 153 countries, according to the company website.

But nowhere is the Buy Greek penchant more prominent than where Greeks already held a strong position: the dairy and food market.

Melissa pasta last year used its Greek identity as the central slogan for a big campaign celebrating the firm’s 60th anniversary.

People at the company herald the newfound patriotism.

“I think this trend is natural and that it was late coming. Turks always bought Turkish products, the Germans always bought German products, why did Greeks think Greek products were inferior?” public relations manager Tina Kikiza asked.

The company has for years had to combat the general wisdom that Italian pasta is the best. What many people do not know, says Kikiza, is that many Italian rivals depend on wheat imports from Greece for their products.

The company’s turnover has not been dented by the economic crisis, climbing from 45 million euros in 2007 to 70 million in 2010. It is expected to reach a similar level in 2011.

Marketing pitfalls

However, marketing experts are wary of the long-term implications of the Buy Greek drive.

“All products are now brands. Their image is important to their viability. So the question is not whether Greek products are better or worse, but what their being defined as Greek has to add to their brand image,” said Daphne Patrikiou, associate creative director at the BBDO advertising agency.

Strategies vary. Some companies — not always Greek-owned — have adopted a consistent corporate approach, emphasizing their contribution to the local economy. The more opportunistic have pitched their Greek credentials with one-dimensional advertising campaigns or with simply putting “Made in Greece” stickers on their products to encourage impulse buying.

To be sure, not all firms have an interest in advertising their Greekness. Those who have for years invested in strategic planning, like eco-friendly detergent manufacturer Planet or natural skincare company Korres, are rather laconic about their origins, reaping instead the benefits of their longstanding niche strategies.

“Being associated with a Greek identity may benefit a product in the short term, but it could backfire in the long run,” Patrikiou said.

Particularly for companies specializing in hi-tech products and devices, experts warn, a Buy Greek strategy could be damaging. Computer and technology retailer Plaisio has made a profitable business in branding its own PC series, but success is attributed to its value-for-money image, not its being Greek.

Irrational exuberance

Made in Greece has never been associated with innovation, quality or style. And this one of the reasons why the country has for decades spent more than it made as consumers looked outside for good products.

But the situation really spun out of control after the country joined the eurozone in 2001. Thanks to the stable and trusted currency, Greeks were able to borrow cheaply. The balance of trade took a nosedive as Greece imported more goods than it produced.

In 1990, Greece’s balance of trade deficit was 446 thousand euros, by 2002 it had soared to 1.7 billion, while in 2006 it hovered at 2.1 billion. Meanwhile, Greek imports in 1990 were valued at 1.6 billion euros; in 2002 the figure went up to 4.7 billion and by 2006 it had skyrocketed to 5.9 billion.

The overconsumption of foreign goods also had a cultural aspect. After a long stretch of political instability and poverty, the newly empowered Greeks — often powered by provincial attitudes — developed a soft spot for foreign goods. The figures were backed by anecdotal stories of Greeks infamously storming London’s Harrods and Selfridges on weekend shopping sprees.

The situation prompted a reaction by the now defunct association for the promotion of Greek products. A Buy Greek promo made at the time mocked Lakis, a tacky character showing off his flashy designer buys — all foreign imports. At least Greeks created their own word for the trend, “xenomania,” meaning the extreme love for all things foreign — a regular topic of high school essays during the 1980s and 90s.

These days, the Buy Greek message is mostly spread by private firms and business associations, while a number of Facebook pages and citizen groups have also added their voices to the campaign. The website for one aims to inform consumers that products carrying bar codes starting with 520 are made in the country.

The costly truth

The campaigns seem to be paying off. The National Confederation of Hellenic Commerce recently said sales of local products have gone up 44 percent this year as Greeks turn away from dearer imports.

“It seems crazy to me to buy American rice when I can buy Greek-grown rice,” said Katerina Petraki, a mother of two who works as a food inspector.

In the case of foodstuffs, Petraki says, she usually prefers Greek products — including the supermarkets’ increasingly popular own-name brands. They are just as good, she says, and at the same time you support homegrown products.

“I mean, I know it’s a profit-driven ideology — but why not support it? After all, it will help us become more competitive,” she said.

But not everyone appears convinced. Products made here often cost more and some consumers won’t hesitate to opt for cheaper foreign-made items to help their own finances.

“I haven’t started buying more Greek products because of the crisis. I buy what’s on sale. I look at the price, not the origin,” said Maria Andritsou, a civil engineer who has been unemployed for over a year.

“Until now I used to buy Greek flour. Now I buy foreign-made,” said Andritsou, the mother of a 3-year-old daughter.

People like her dislike the idea of having to accept poorer quality or more expensive products in the name of alleged benefits to the national collective. Such misplaced patriotism, she says, would be like a reward to substandard local suppliers.

“Greek manufacturers have overcharged for so long. Why should I support them now?” she said.

The costly truth is that concepts like home economics and consumer education have long been mostly alien to the average Greek. Consumers rarely did any market research, thus discouraging price competition among local retailers. Greek products were as a result more expensive than their foreign counterparts, which made little economic sense given the cost of transport and logistics.

Who gains?

Consumers often complain it’s hard to know if their money goes to the right place. Product identity in the globalized marketplace of complex ownership structures and competing loyalties can become uncomfortably fuzzy.

The fact is it’s not always clear where products are manufactured or who profits. The Misko pasta factory is controlled by the Barilla Group, Marinopoulos has been taken over by Carrefour, even Metaxa, the world-famous brandy maker, is now owned by France’s Remy Cointreau Group.

But commerce is not necessarily a zero-sum game. Although owned by Barilla, Misko still makes the brand’s products using Greek raw materials. For obvious commercial reasons, Barilla has kept the famous Misko brand logo featuring a Greek Orthodox monk riding a donkey. But, more importantly, the Italian giant operates one of Europe’s biggest pasta factories in Viotia.

Foreign companies like Ikea, Bic or the AB Vassilopoulos supermarket chain, which is controlled by Belgium-based retailer Delhaize, are keen to stress their contribution to the local economy, since they employ thousands of Greek staff and pay taxes to the Greek state.

“We don’t see ourselves as a foreign supermarket,” AB’s communication manager Alexia Macheras said, noting that the company is the fifth-biggest employer in Greece with more than 11,000 staff.

She said AB has for years supported local production by promoting homegrown goods while running campaigns to support Greek foods, clothes and tourism.

I want that Pony

Despite upbeat early statistics, experts insist that Greekness alone is not enough to shape people’s long-term purchase preferences and ensure sustainable growth for the companies.

“Consumers can see through advertising practices and remain rather skeptical toward them. They need a stronger sell to adopt a habit. A product’s national identity is not a strong sell on its own,” Patrikiou said.

Business gurus have a tendency to urge us to see crises as opportunities. Reports last month said that former Greek car manufacturer NAMCO is due to begin production of a new version of the poor man’s SUV, the Pony, which hit the country’s streets in the late 1970s and early 80s. If Greece were to exit the eurozone and return to a devalued drachma, beloved products like quality German cars would be out of reach for local consumers, who would have to depend heavily on locally made products. It would be interesting to see then how many people here would give up their dearest BMW or Mercedes for the more humble Pony.


The expensive cost of cheap water

Photo by GenBug/Flickr

By Harry van Versendaal

From drinking to cleaning, from making newspapers to automobiles, water is used in ways that escape our awareness. Water, in other words, is too precious to be wasted, but this is exactly what’s happening, prompting a number of groups to promote ways of conserving it. One way, say some, is raising its price — as the argument goes, cheap water comes with a hefty price tag.

Experts meeting in Madrid late February warned that governments in the northern Mediterranean must phase out irrigation subsidies to farmers or risk a ballooning threat to the environment and food security.

“There are increasing incentives to produce more and to use more irrigation, because there is a very attractive market out there waiting for these same products,” said Kevin Parris, an economist at the Organization of Economic Cooperation and Development (OECD), pointing a finger at developing markets in India and China.

Growing demand, as a result of rising world populations and changing dietary habits, and the climate change wild card are putting a strain on water resources and intensifying the need for more efficient management of this, a precious albeit long-squandered resource.

Data is often fragmented, but the pattern is there. Some 47 percent of the world’s population will live under severe water stress by 2050, the OECD predicts. Meanwhile, farmers will need to produce nearly 50 percent more food up to 2030 and double output by 2050 to match soaring demand, according to the Paris-based organization.

Things will only get worse as a result of global warming. That, most scientists predict, will increase irrigation needs by 26 percent while exacerbating the consequences of desertification, deforestation and soil erosion — especially in the southern hemisphere.

Thirsty farmers

Agriculture is the main user of the world’s freshwater withdrawals, accounting for almost 70 percent. Eight percent goes to urban use. It is often missed that H2O is used to make everything from electricity to automobiles. So industry consumes about 22 percent of resources. Water demand among factories and domestic users has quadrupled over the past 50 years.

Water is a finite resource, which means there is only a certain amount of it out there. It is used, but it is never really used up. Water evaporates from the ground or transpires from foliage to become cloud before falling back to the earth as rain. Although humans have found a way to remove salt from seawater, a practice known as desalination, the technology, which is gaining ground in Spain, Israel and Australia, comes with a poor environmental record. It damages the coastline while using up big chunks of energy which adds to the greenhouse effect.

There is no easy way, it seems, when it comes to protecting the environment.

“There is not much to do on the supply side,” Parris said, adding that efforts should instead focus on curbing demand. And there is no better way to accomplish this, most experts agree, than by introducing a price for water that reflects its true cost.

Most governments provide financial support for irrigation — allowing farmers to pay far below market prices. Policymakers do so to serve social and political objectives, such as food security and regional development in poorer areas, but they remain deaf to the collateral damage caused by underpriced water.

Undercharging for irrigation water, Chris Charles, project manager of Global Subsidies Initiative (GSI), told the Madrid conference, has dire environmental and economic repercussions such as groundwater depletion and pollution, as it encourages intensively farmed and pesticide-intensive crops, while at the same time distorting international markets.

No transparency

A recent study by the GSI, which is a chapter of the International Institute for Sustainable Development (IISD) found that Spain spends an estimated 1 billion euros a year on irrigation subsidies. Other countries in the northern Mediterranean — Greece, Italy, France and Portugal — the report said, also provide generous aid but the true magnitude is hard to determine as governments are wary of sharing too much information.

“That money could be better used in other parts of the economy,” said Charles of the Geneva-based outfit set up to monitor government subsidies and their impact on sustainable development.

In most cases, farmers only pay for the operation and maintenance costs for water, while shunning their due share of capital costs for hydro projects like dams and canals.

On top of discouraging the switch to water-wise technologies such as surge flow irrigation, low pressure sprinklers, drip-irrigation and moisture sensors, subsidies is the thick wall obstructing the eco-signal. “There is no scarcity message in the price of water,” Nuria Hernandez-Mora, president of the New Water Culture Foundation (FNCA), a Spanish non-governmental organization, told the conference.

Advocates of subsidies say that slashing state support is going to push up commodity prices for consumers and drive many farmers out of business. But those concerns, critics say, are not backed up by evidence. “The rise in water prices does not increase food prices at the supermarket,” Parris said, drawing on past experience in Australia and Israel.

Some people argue that the out-of-whack economics of the EU’s common agricultural policy (CAP), a system based on mammoth subsidies and artificially cheap exports, has not helped much toward conservation either. “Most aids go to intensive farming systems,” said Eva Hernandez of WWF Spain’s freshwater program.

CAP subsidies gobble up over 40 billion euros a year, i.e. more than 40 percent of the bloc’s budget. The biggest chunks of aid, Parris said, go to the richest farmers in the north who produce more water-intensive goods such as dairy, sugar beets and beef. “In the EU the richest farmers get the bulk of the subsidies. It’s bizarre and unfair,” Parris said.

Tampering with subsidies, of course, is always a tricky one for politicians who are wary of disaffecting their voters. Aid is systematically used as a tool to benefit specific groups of people which is why governments can be quite laconic about the allocation of handouts.

“Subsidies themselves create a pool of money out of which recipients can influence the very political process that channels money to them in the first place,” a recent GSI report notes. The problem is that, particularly in the southern European world of corruption-prone politicians, petulant unions and vested interests, government aid has come to be seen as natural. “Subsidies thus metamorphosize into entitlements and any attempt to curb them becomes politically hazardous,” the report says.

Greeks know a thing or two about entitlements. Local farmers have repeatedly blocked major highways with their tractors to press with their demands — and they have in most cases gotten away with it as governments pay the price for the salience of patron-client relations. This scene was repeated in early February when hundreds of farmers, from northern and central Greece, threatened to block the border with Bulgaria in a bid to pressure the socialist government into giving them tax-free gasoline, compensation and subsidies.

Know your rights

In recent years, alternative concepts have been put forward to improve water management. One of these plans is water trading, whereby users buy and sell water rights. The idea is to direct water toward high-value uses, and the scheme has found success in Australia where water rights are in some places transferred on a temporary or permanent basis between stakeholders. The recycling of water also holds promise, but low water prices do not make recycling very interesting to farmers.

Others advocate the introduction of a water footprint to track the amount of water that goes in the production of each good. According to calculations by Water Footprint Network, a Dutch-based non-profit foundation, an apple requires 70 liters of water, one glass of beer 75 liters, and one hamburger 2,400 liters. But numbers like these are unlikely to change our increasingly demanding dietary habits, especially as more and more people around the world rise into the middle class (2 billion people currently stand on the threshold, according to a recent Economist report). “Times have changed. My daughter these days wants to eat strawberries in midwinter,” Parris said.

To make things a bit more complicated, some people hold that water is a natural right and should thus be provided free of cost. That’s a cultural, economic and, perhaps, philosophical question. But even if water came from god, the standard counter-argument goes, it did so without the dams and the water pipes.

Those wasteful Greeks

Agriculture in Greece uses 87 percent of water resources — a staggering figure that is close to the average in developing countries. Low water prices have made local farmers shy of technological innovation (outdated sprinkler systems, often seen wetting neighboring plots of land or the asphalt road, are still very widespread) while encouraging water-intensive crops such as cotton.

Cotton farmers in Greece, one of the main beneficiaries of EU funds, have in the past been subsidized by up to four times the market value of their crop, but CAP reforms over the previous year have made things harder for freeloaders.

Management has never been the Greeks’ forte and management of water, too, leaves a lot to be desired. Agriculture is heavily dependent on groundwater and access is often ensured via illegal wells. Due to overpumping of groundwater, withdrawals are being extracted faster than they are recharged.

The excessive use of water is evident in the heavily farmed plain of Thessaly. A controversial project to divert the country’s second-longest river, the Acheloos, from Western Greece to the area was recently suspended by Greece’s highest administrative court citing environmental concerns.

An OECD report published last year put total subsidies for Greece over 141 million euros. “No significant effort has yet been made to make farmers pay for the important rehabilitation and maintenance costs,” the report said. The country’s landscape and the economic significance of the agricultural sector (the contribution to Greek GNP is one of the highest in Europe), it said, “are factors which explain the delay in implementing water pricing reforms.”

The EU water framework directive, launched about a decade ago, was designed to reform water pricing and financing policies toward full cost recovery. But it has yet to make an impact on Greece, where, according to an assessment published by the Greek environment ministry in 2008, the cost recovery level ranges between 1.78 and 56.25 percent.

Current trends are clearly unsustainable, but little can be achieved unless we all come to realize the true price of water. “If you ask how much a liter of gas costs, most people will know,” said Parris. “If you ask them the price of water, nobody knows.”

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