Greece’s first “National Social Agreement” on prices was finalised at Maximos Mansion. The Greek government has announced the abolition of the cap on gross profit margins from July 1, alongside an agreement with the food industry and supermarket chains to maintain current reduced prices and prepare a new round of price cuts from September.

The announcement followed a broad meeting held on Monday at Maximos Mansion, the prime minister’s office, under Prime Minister Kyriakos Mitsotakis.

The meeting was attended by Deputy Prime Minister Kostis Hatzidakis, Development Minister Takis Theodorikakos, Despoina Tsaggari, head of Greece’s Independent Authority for Market Control and Consumer Protection, SEV president Spyros Theodoropoulos, SEVT president Ioannis Giotis, Hellenic Supermarket Association president Giannis Masoutis and the association’s general director, Apostolos Petalas.

The Development Minister described the move as a new phase in efforts to address high prices, saying there was “a shared understanding that this de-escalation should be passed on to product prices, with prices stabilised in the first phase during the summer months”. According to the minister, the government believes that the conditions now taking shape in the economy allow a shift away from emergency administrative measures and towards an agreement with the market.

What was agreed

The cap on gross profit margins will complete its cycle on June 30 and will not be extended. In its place, the food industry and supermarkets have committed to maintaining the reduced prices already applied to around 2,000 product codes throughout July and August.

At the same time, joint preparations will begin immediately so that, from early September, a new package of significant reductions can be applied to basic goods consumed by Greek households.

As Theodorikakos clarified, “the commitment from businesses is that these reductions will remain in place over the next two months, while preparations will be made so that, in early September, there can be a drastic reduction in prices on basic products used by households”.

The government has not set a specific numerical target for the reductions, but has made clear that it wants them to be as substantial as possible.

Why the cap is being withdrawn

The Development Minister linked the decision to the de-escalation of international oil prices and the gradual easing of transport and production costs, arguing that the conditions are now in place for this easing to be reflected in final product prices.

“What we wanted to get from the cap, we got. Prices are not going back up,” he said, arguing that the measure had acted as a deterrent against new price increases.

He went so far as to describe the profit-margin cap as a “fiercely interventionist, socialist” measure, stressing that it had been imposed because of the extraordinary conditions created by the war and the energy crisis, and that it could now be withdrawn.

The role of the new Authority

The government has made clear, however, that lifting the cap does not mean a relaxation of oversight.

The Independent Authority for Market Control and Consumer Protection will take part both in the preparation of the agreement and in monitoring its implementation, assessing in practice whether businesses honour the commitments they have undertaken.

The minister said the government would closely monitor the course of prices and that “everyone’s credibility will be assessed”, sending a clear message that the commitments made at the meeting will be tested in practice.

The September test

The agreement marks the culmination of a strategy that began with the “Poso Kanei” price-comparison platform, which, according to the Development Ministry, has already been used by more than 300,000 citizens.

It continued with the creation of the Independent Authority for Market Control and now moves into a new phase, with the market itself participating in the effort to contain and reduce prices.

The key question now is whether the agreement reached at Maximos Mansion will translate into meaningful relief for households.

As the minister himself acknowledged, the details concerning the scope and duration of the new reductions will be finalised in the coming period, with the aim of presenting an organised plan from early September for the de-escalation of prices on basic, widely consumed goods.

Should any of the parties involved proceed with price increases in the meantime, the minister said that “this is precisely why we made the announcements, so that both your credibility and ours can be assessed”.

Takis Theodorikakos’ statement

“Addressing the issue of the cost of living and high prices for many of our fellow citizens is unquestionably a priority for the government as a whole and for the prime minister, under whose chairmanship today’s meeting with productive bodies was held.

The end of the war in the Middle East is leading to a normalisation of oil prices and, therefore, to an easing of the international inflationary pressures that had emerged in recent months.

At the meeting with representatives of industry and supermarkets, there was a shared understanding of the need for this de-escalation to be passed on to product prices, in a first phase over the two summer months, with full price stabilisation and absolutely no increases.

I would like to note that this concerns the 2,000 product codes which, in recent months, were reduced by 6% as a result of the strict implementation of the profit-cap measure that we had imposed on an emergency basis.

The commitment from businesses is that these reductions will remain in place during the two summer months for these 2,000 product codes.

Preparations will then have been made so that, from early September, a drastic reduction in prices on basic products that concern consumers and are widely used by the average Greek household can be implemented in the market, as a product of a national social agreement. Our common goal is to protect consumers.

It is recalled that the profit-cap measure expires on June 30.”