IT WAS shocking to see the prices of milk and bread sold in Cyprus compared to those in Germany. A 1kg loaf of white sliced bread in Cyprus is sold at a price that was between 104 and 186 per cent higher than in Germany. As for milk, it was between 33 and 153 per cent more expensive in Cyprus. And the price difference of a kilogram of yoghurt was between 114 and 202 per cent.
The price comparison was presented by the Cyprus Consumers’ Union and Quality of Life Association which called for a boycott of these products, “in order to get the message across about the price.” An organisation spokesman also pointed out that average wages in Germany were significantly higher than in Cyprus, so why were these products being sold at less than half the price we were paying for them?
The spokesman suggested that producers and retailers in Cyprus were greedy and had “no respect for consumers”, struggling to make ends meet during the recession. It is true that producers and retailers work with high profit margins, but the reason was not just greed, but also the smallness of the market. The option of high turnover and smaller margins does not really exist in Cyprus nor do economies of scale because of the low outputs.
Very little could be done about this but the other cause of the high prices – price collusion – could be tackled by the authorities. Dairy farmers, for instance, are guaranteed high prices for their milk, and this is reflected in the high prices for dairy products. The fact that there are only two sellers of milk on the island does not exactly promote competition, although the market might not be able to sustain a third. No government however, is prepared to take on farmers or producers for practices that run against the rules of competition.
Would the boycott of bread and milk products force producers and retailers to lower prices? It could, but how would consumers be persuaded to take part in a boycott, or at least decrease purchases of these products, to such an extent that suppliers would feel the pinch? It is not an easy undertaking, especially as bread and dairy products are part of the staple diet. Funnily enough, the milk prices are set to rise again next month, according to producers, as a result of increases in electricity rates and animal fodder.
Perhaps an extended milk and bread boycott, however unrealistic it may sound, would be the only way for consumers to fight back.
