How the Greek economic crisis is affecting its seafood industry

Greek seafood suppliers are among the hardest hit by the country’s economic crisis. Producers, processors and importers are not only suffering from several months of economic turmoil but also the freeze on bank credit lines that was issued 29 June.

The aquaculture industry in Greece, which consists of 65 companies producing EUR 500 million (USD 550.4 million) in sales annually, has incurred significant supply and cash flow problems. It is impossible for aquaculture companies to obtain loans from the banks and corporate credit lines are “stagnated,” according to Yannis Pelekanakis, general manager of the Federation of Greek Mariculture.

“The aquaculture industry, just as the rest of the Greek economy, relies heavily on imports, especially of raw materials, such as for fish feeds. This causes problems in the supply chain,” Pelekanakis said. “The basic challenge that we have to deal with is the increased cash flow needs mainly due to the capital controls and the value-added tax (VAT) raise from 13 percent to 23 percent for juveniles and fish feeds,” Pelekanakis said.

Feeds represent nearly 60 percent of aquaculture companies' total production cost, he added.

Xenofon Lourantas, general manager of frozen seafood processor Vassiliou Trofinko, which produces EUR 50 million (USD 55 million) in annual sales, reports similar problems among seafood importers and processors.

“We are importing EUR 2 million (USD 2.2 million) to EUR 3 million (USD 3.3 million) a month in seafood, and didn’t have the raw materials to supply our customers and keep the factories running,” Lourantas said. “Our customers could not pay, and the credit lines from the bank were not available.”

Now that banking regulations have loosened, allowing businesses to access EUR 100,000 (USD 110,000) per company per day, Vassiliou Trofinko’s business has returned to around 80 percent of what it is normally. “If you have four banks, you can get up to EUR 400,000 (USD 440,260) per company per day. That is sufficient for a company our size,” Lourantas said.

The move is also aiding the country’s aquaculture producers. “This is a positive measure as the daily operations of the producers are coming back to a normal situation,” Pelekanakis said.

However, the Bank of Greece must further ease banking regulations in August, or more seafood suppliers will be forced to go out of business. “If things do not relax, we will have casualties in September or October, the most difficult months in this country. Quite a few of the companies will not be able to survive and unemployment will increase,” Lourantas said.


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