Prime Minister Kyriakos Mitsotakis, in a letter to European Commission President Ursula von der Leyen, requested interventions in EU Law to ensure equal treatment and consumer protection from the price markup imposed by multinational corporations. He highlighted that these corporations, especially in oligopolistic markets, remove at least 14 billion euros annually from European households’ disposable income. Mitsotakis emphasized the need for bolder steps for more competition and transparency in the Single Market. Also proposed was for EU-level legislation to effectively address Territorial Supply Constraints, where these restrictions are not justified by factors that promote societal welfare. Minister of State Akis Skertsos coordinated the initiative and the development of the arguments presented in the letter.In addition, multinational corporations impose price markups amounting to at least 14 billion euros annually on European consumers through geographical supply restrictions. This issue has been discussed for years, with a 2020 European Commission study highlighting significant consumer losses due to these restrictions. The problem has intensified with rising inflation and increased corporate profits.
Significantly, a 2023 study conducted by Leiden University found that these supply constraints are a hidden factor driving inflation, particularly affecting smaller countries. Recently, seven EU countries called for the abolition of these restrictions. In Greece, for instance, the price of baby formula remains disproportionately high despite government-imposed profit margin caps. The Greek Competition Commission previously identified a 32% price discrepancy compared to the lowest prices in Europe.
Multinational companies exploit geographical restrictions (TSCs) to prevent parallel trade and protect their profits. These restrictions include:
1. Refusing to supply wholesalers/retailers who sell outside designated areas.
2. Differentiating product content or branding across regions.
3. Limiting product quantities to hinder wider distribution.
4. Using single-language packaging to prevent cross-border sales.
In Greece
In Greece, among the few substantiated cases was that of Colgate-Palmolive. In 2017, the Competition Commission fined the parent company and its Greek subsidiaries 9.4 million euros for prohibiting parallel imports in its commercial agreements with major supermarket chains.
The penalty for any retailer violating the rule was the withdrawal of discount privileges. Later, the parent company managed to be acquitted by arguing it was unaware and not responsible for the practices of its subsidiaries.
The Competition Commission’s checks revealed, among other things, that between 2001-2008, 85%-95% of comparable products were more expensive in Greece than in Italy, and 40%-65% of these products were at least 20% more expensive. Additionally, 73%-85% of products were more expensive compared to Spain, France, and Portugal.
