The Greek government’s Ministry of Development has imposed a €1m ($1.1m) on Unilever for profiteering “unfairly”.

The fine concerns the violation of article 54 of a law that regards “the reduction of phenomena of unfair profit”.

Kostas Skrekas, Greece’s Minister of Development, said yesterday (2 November) Athens has “made it clear” that “no one is above the law”.

He said: “We are determined to enforce the law to prevent profiteering and to stimulate healthy competition, for the benefit of the Greek family. 

“Everyone must realise how critical the situation is and the difficulty for households to access basic consumer goods. Dealing with inflation, and especially the inflation of greed, is primarily a matter of social responsibility but also of ensuring the cohesion of society. Checks will continue and fines will be issued without hesitation. The battle with accuracy is ongoing and ongoing. We are not complacent.”

London-listed Unilever issued a statement in response to the penalty, stating it will proceed with the “prescribed procedures for contesting the fine”.

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The statement said: “While we understand the reasoning behind the ministerial decision to maintain the gross profit margin, we disagree with the methodology by which the regulatory authorities calculated the fine, not taking into account key parameters of how the retail market works and accounting standards.”

The FMCG giant added its presence in Greece included 450 employees, a factory in Attica and two privately owned distribution centres.

Procter and Gamble was another FMCG giant to be fined by the Greek government for profiteering.

Unilever’s Greek business, known as Elias Unilever Hellas, said it recognised “the pressure on consumers’ purchasing power from the rising cost of living and made the conscious decision not to transfer a large percentage of its additional production and operating costs to burden on our company’s profitability, thus protecting consumers and retailers”. It added that this was recorded in published financial statements.

Elais Unilever Hellas said it “will participate, with more than 80 known product codes from all its categories, in the “Permanent Price Reduction” initiative of the Ministry of Development”.

Greece’s headline inflation averaged 9.3% in 2022 but declined to 6.3% by the opening quarter of 2023, according to the EU’s European Commission.

Price pressures are expected to further moderate this year thanks to easing energy prices. Consumer prices are forecast to increase by 4.2% and 2.4% in 2023 and 2024 respectively.

In Unilever’s latest results, third-quarter underlying sales growth rose 5.2% for a turnover of €15.2bn, which was down 3.8% in reported terms. Over the nine-months, the metric grew 7.7% to €45.8bn, with reported growth of 0.4%.

Unilever has also come under fire recently for its continued presence in Russia, which invaded Ukraine in February 2022.

In July, Unilever was added to the “international sponsors of war” list of Ukraine’s National Agency for the Prevention of Corruption (NACP).