The collapse in the catering sector in Greece has made leading companies in the area seek external untapped markets to offset the losses due to the ongoing crisis. The increase in VAT for restaurants to 23% was the final nail in the coffin of the sector whose turnover has dropped by 44% in the last two years. It decreased from 3 billion to 1.7 billion euro and is tending to further decline in the coming years. As a result, five thousand commercial sites have closed and thirty thousand people are unemployed.
In this unfavourable business environment, Vivartia Holding, which holds brands like Goody’s, Everest, Flocafe, La Pasteria, Olympus Plaza Food, Κuzina, Papagallino, Olympic Catering, Hellenic Catering continues to invest. The Holding is planning to invest a total of five million euro this year and its investment over the last three years reached 35 million euro. The company is making strategic reforms on the domestic market by closing unprofitable stores and opening new representations in more successful commercial sites.
Vivartia Holding’s Executive Director Ioannis Artinos explained that the main part of the investments is directed towards foreign markets, such as Albania, Montenegro, Macedonia, Kosovo, Belarus, Ukraine and Kazakhstan. The company offers a master franchise in these countries and it is currently trying to enter the markets in the Persian Gulf, Middle East and North Africa. The holding company will open its first shops in Belarus by November this year. They will be Goody’s – an American-type fast food chain but offering Mediterranean products, Everest – mainly for quick coffee, breakfast and sandwiches and Flocafe, which offers a wide range of different types of coffee drinks popular in Greece. The campaign of Vivartia Holding in Albania is more intensified and it will open four representations of Goody’s, four of Everest and four of Flocafe by the end of the year.
The management of the holding company stated that by entering new markets, the Holding can increase its net sales by 120 million euro and the orders for raw materials from domestic production can increase by 15% -20%.
Businessmen are urging for a change in the taxation of catering goods and services in order to reduce the negative effects of recession. On the one hand, there is a serious decline in consumers’ income. The average drop in income is estimated at about 35% of total income compared to the levels of two years ago. On the other hand, governments have doubled and even tripled the tax burden over businesses and individuals in this period, thus drastically reducing consumption. Industry representatives met with both government and creditors to demand a VAT reduction in catering from 23% to 9%. The final decision will be the result of the renegotiation of the bailout agreement that is to take place in late summer.
"The reduction in VAT in a sector in which 600 thousand families make their living will reduce bankruptcies, increase turnover, strengthen employment and will allow insurance funds and the economy as a whole to take a breath," the businessman insists. Vivartia Holding still has a sales volume of 360 million euro and it is still running at a profit. It has a total of 550 commercial sites and serves approximately 500 thousand customers a day. The enterprise has five thousand employees and five production units.