Profit margin cap ends tomorrow for food and fuel in Greece
Multinationals React as Four-Year-Long Measure Expires
Starting tomorrow, Greece will lift the legislative cap on profit margins for companies operating in the food and fuel sectors. The cap, which limited businesses’ gross profit margins to 2021 levels, has been in place continuously for four years.
As revealed by OT, the Interagency Market Control Unit (DIMEA) conducted widespread inspections of the ten largest supermarket chains earlier in June. Authorities collected tens of thousands of transaction documents to monitor compliance with the capped profit margins.
Even though the regulation is being officially withdrawn, any manipulation or inflationary pricing practices discovered in audits may still result in fines, according to Ministry of Development sources.
Why the Cap Is Being Lifted
“The measure served its purpose and is no longer necessary,” a Development Ministry source told OT. Data supports this view:
According to Circana’s weekly market barometer, in the first week of June, sales grew by 5.3%, volume increased by 3.9%, and prices rose only 1.4% year-over-year.
However, continuous extensions of the cap triggered strong pushback from the business sector, especially after 2023, when inflationary pressures began to ease.
Heavy Industry Backlash – and Penalties
Numerous companies—particularly multinational suppliers and retail chains—were hit with significant fines for violating the regulation during its enforcement. These businesses have since challenged the fines in court.
In addition, the government’s stance led to an unprecedentedly hostile political tone toward multinationals, especially from Prime Minister Kyriakos Mitsotakis, who declared, “We are not a banana republic.”
This statement was followed by two formal letters to European Commission President Ursula von der Leyen, requesting that the commercial strategies of multinational corporations be reviewed.
Tensions Within Institutions
The government's anti-inflation initiatives—such as the “household basket” program—provoked friction with the Hellenic Competition Commission, which reluctantly approved some of the interventions.
The conflict escalated into a breakdown of relations between the Ministry of Development (under Adonis Georgiadis and later Kostas Skrekas) and the Competition Commission’s then-president Ioannis Lianos.
One of the most significant clashes occurred between SEVT (the Federation of Hellenic Food Industries) and Minister Skrekas. In a symbolic move, the federation did not invite Skrekas to its General Assembly for the first time, instead welcoming Finance Minister Kostis Hatzidakis. SEVT president Yiannis Giotis addressed him, stating, “You are the one we want to work with.”
Conclusion
As Greece enters a new phase without the profit cap, the government emphasizes that market surveillance will remain active. Still, the decision marks a shift toward greater pricing freedom for businesses, though it comes with lingering legal battles and strained relations between the state and major market players.
