The news that Greek-style yogurt maker Chobani is looking to sell a minority stake that would value the company at around $2.5 billion should in theory be a big boost for Greece’s beleaguered dairy industry.
But instead, the main beneficiary will be Chobani’s Turkish founder, who operates the company in upstate New York, and who has proved to be innovative in a way that Greek dairy farmers are not. In fact, they are so stuck in their traditional ways that it’s actually illegal in Greece to call low-fat yogurt “yogurt.” Any variant that contains additives of any sort must be labeled “dessert of yogurt,” which is akin to waving a warning flag at consumers.
That sort of rigid regulation is the norm in Greece, and not just in agriculture. Examples abound. There’s a rule dating back to the 1970s that prohibits producers of apple vinegar from packaging it in anything other than one liter bottles. Another set of regulations, this time from the 1980s, outlaws bulk sales of mayonnaise and the import of some types of cloves. Supermarkets are prohibited from selling aspirin. Fresh milk is required by law to have a shelf life of just five days. As for olive oil, one of the staples of the Mediterranean diet and an important source of revenue for the Greek economy, producers are strictly forbidden from blending it with vegetable oil for domestic consumption. The rationale: olive oil is at the core of the Greek diet, and the health of the population is at stake.
These rules are among the hundreds of restrictive business practices in Greece that a team from the Organisation of Economic Cooperation and Development identified last year, as part of an 11-month investigation commissioned by the Greek government. In its report the OECD made 329 recommendations for rules that should be changed to open up competition and give a much-needed boost to the economy.
Quantifying the cost of these restrictions is a difficult task, but in 66 cases, the international experts did figure out a way to do so. Eliminating them would lead to a positive effect on the Greek economy of 5.2 billion euros, or just over $7 billion, they calculated. While that may not seem like a huge sum, in today’s Greece, every penny counts. Kostis Hatzidakis, the Greek minister for Development and Competitiveness, is promising action “very soon” to retire some of the most intrusive rules that he says are holding back his nation’s competitiveness.