The Greek crisis from alcohol's front line - Focus
The drinks trade is Greece is feeling the affects of the country's debt crisis
As Greek Prime Minister Alexis Tsipras delivers new proposals to tackle the country’s debt crisis, Lucy Britner takes a closer look at what it means to the local drinks trade.
"People are depressed," says Athens bar owner Thanos Prunarus. His bar, Baba Au Rum is so successful that it has appeared in the World’s 50 Best Bars list and it welcomes visitors from all over the world. But the turmoil caused by the country’s unresolved debt crisis and the question mark over its inclusion in the eurozone is taking its toll on the drinks industry.
"Things are not good at all, everyone is depressed and of course they don’t spend money. Business has been down about 40% over the last few days at our bar," says Prunarus.
This figure of 40% is also being felt elsewhere in the trade and Demetre Steinhauer, co-owner of drinks marketing and distribution company Concepts, said the overall feeling from consumers is one of caution. He believes that alcohol consumption during the last two weeks is down 40-50%. "People are focusing their expenditure on other things, such as food," he says.
Steinhauer distributes many international brands, including Disaronno, Budweiser Budvar, Tia Maria, Branca, Carpano, Greenall’s Gin and Underberg. He also exports his own brands, including liqueur Skinos Mastiha Spirit.
"The trade is having issues with finance," he says. "Most companies are asking for cash only and some are wiring money through the bank but this only works within Greece - you can’t do any international wiring unless it’s an emergency.
"What doesn’t work is the credit system - you cannot get pre-payment on bank drafts or finance business based on bank drafts and invoices."
Steinhauer says that although his local business is still on "a positive trend", it has slowed down in the last few weeks.
"The impact depends on how long the uncertainty lasts - the more it continues, the more we will be losing business. There’s no doubt about that."
For bar owner Prunarus, cash is also the only answer. "We have to pay cash for every order," he says. "Happily, we personally don't have any problem with that." But for others, especially less established businesses, this could be a problem. And so could getting your hands on physical notes.
"I don’t believe that cash points will run out of money, but you can take only EUR60 per day," adds Prunarus.
Nick Sarantakis from The Sky Spirits Company, which represents Monin, Diplomatico, Nikka Whisky
and Hayman’s Gin, among others, says he has seen a 50% decrease in sales.
"From the announcement of the referendum in Greece, consumption has decreased more than 50%. The consumers are very worried about the situation and very anxious about what is going to follow. So they tend to consume less, or buy cheaper products.
"We have seen around a 50% decrease in sales."
Sarantakis says moving money is a problem for him, too, and if the country leaves the euro, he can foresee currency woes. "It will be extremely difficult to import as we have to pay in euros and local currency will be much more weak," he adds.
There is a small silver lining, though, and Concepts’ Steinhauer sees some potential.
"Within a crisis there is always opportunities for new business. You have to constantly evaluate the market and position your company the right way."
His export business, for example, remains unaffected and is growing in double-digits.
Prime Minister Alexis Tsipras will submit a new plan by the end of 9 July and it will be debated at an EU Summit on 12 July. One thing's for sure: the longer it takes for Greece and the eurozone to reach a decision, the worse it's going to be for the trade.
- Why Scotch must drop the 'malts good, blends bad'
- Pernod's mood darkens over India - Analysis
- Does alcohol accelerate the onset of dementia?
- Soft drinks is losing the recycling game
- Cognac is back - is Remy Cointreau ready?
- Diageo to cut 105 jobs in Scotland, 50 in Italy
- Scotch sales set to soar, despite recent struggles
- Pernod Ricard posts solid YTD sales jump - results
- Pernod Ricard YTD fiscal-2017 sales performance
- Cognac needs innovation at bottom end - Pernod
- Global Scotch insights - market forecasts, product innovation and consumer trends
- Global Champagne and sparkling wine insights - market forecasts, product innovation and consumer trends
- Battle of the Generations - The fight for iGen, Millennial, Gen X and Baby Boomer consumers
- Myanmar - ISA Country Report
- Flavoured Powder Drinks in 2017: Confronting an Ageing World