Taxes in Greece will increase on January 1st on basic products such as tobacco, coffee and olive oil. Locals and traders are stocking up before the higher costs take effect.
The economy in Greece is still stuck on the difficult side. With taxes on olive oil rising from 9 percent to 13 percent tomorrow, many Greeks are rushing to buy and stock up on the staple among other products. Every hour counts, especially for those in the trade who have boosted their stocks in the past few weeks.
“Some people are hoping to make stocks for six months,” said Giorgos Kourasis, general secretary of the Greek Federation of Catering Trades. “It is a real tsunami of taxes that are falling on us, in this seventh year of recession. Something we have never seen — and professionals will have to absorb this increase so as not to lose their clients.”
Many sectors are affected by the VAT increases, including telephone, cable television, gasoline, electronic cigarettes and tobacco. “The latest increase on cigarettes happened not even eight months ago,” Kourasis said. “Greeks are going to buy illegally from neighboring countries.”
Traders fear a drop in sales to tourists who are keen on Greece’s flagship product. The rush is less visible in supermarkets, but professionals fear a drop in the consumption across the board. This could be the case for coffee, which is also consubstantial to the Greek life, as it will increase from €2 to €4 per kilo on average.
For Greek people, the Year 2016 has already been quite hard with higher VAT and new government taxes applying to basic products.
In May 2016, the press was making jokes on the drastic economic measures: “Only the air that we breathe will not be taxed,” a headline read, after the new package of measures proposed to the Greek Parliament on May 23 in exchange for a release of a €5.4 billion loan.
The Greek MEPs adopted the new measures requested by the country’s creditors as a condition for unblocking the loan. The weak majority of the government, led by Alexis Tsipras, had just passed a very unpopular 7,000-page bill.
The law included a mechanism for automatic correction in the event of fiscal slippage and additional measures to accelerate public companies privatization. And the series of measures also included a barrage of taxes, one of which targeted the hotel industry. Various taxes also weighed more on consumption products, including olive oil.
So the start of 2017 does not look to bring much relief.
More articles on: financial crisis, Greece
Jun. 12, 2024
Record Olive Oil Prices Drive Food Inflation in Greece
A study from the National Bank of Greece found that record olive oil prices were responsible for almost 50 percent of the increase in total food inflation.
Dec. 5, 2023
Soaring Expenses Strain Producers in Southern Europe
Olive oil producers in Spain, Italy and Greece are grappling with challenges that threaten the viability of the sector.
Oct. 23, 2023
Rising Prices, New Technology Attract Private Equity Interest in Olive Oil
Analysts are eyeing promising financial returns in the olive oil market, particularly in Spain and Portugal.
Feb. 19, 2024
A Dismal Harvest Concludes in Greece
With the country’s olive oil production almost halved compared to last year, record prices at origin have shaped a market searching for equilibrium.
Aug. 24, 2023
Olive Oil Prices Soar in Greece
The shortage of olive oil stocks in Europe and domestic inflation are pushing prices to new heights.
Aug. 29, 2023
No Respite in Greece as Wildfires Incinerate Ancient Olive Groves in Makri
Wildfires continue to wreak havoc in rural Greece, partially destroying the traditional Makri olive grove and leaving local producers in despair.
May. 13, 2024
Native Varieties and Centenarian Trees: The Winning Formula for Olivian Groves
After a harvest full of twists and turns, the Peloponnese producer achieved award-winning quality by relying on traditional and modern practices.
Aug. 7, 2023
In Greece, Olive Oil Remains Absent from Restaurant and Tavern Tables
The use of bulk olive oil in cruets for customer consumption has been banned in eateries since 2018. However, sealed, non-refillable bottles have failed to replace them.