News Analysis: Don’t believe the news – Greece is actually not doing so badly

Psychologists say that about 70% of the effects of an economic crisis in a society can be attributed to, well, psychology. The way you react is not about what actually happens to you, it is about what you think might happen, or, even worse, about getting prepared for the worst. 

So, a sector such as the drinks industry, with alcohol itself being a mood-changing substance, will react in interesting ways in times of crisis – especially in countries with a long and loving relationship with wine and spirits.

Before anything else, a point has to be made about the current situation in Greece. Let’s make it with a non- Greek’s words. Beppe Grillo, the Italian political activist, told the Financial Times of his recent visit to Athens: “I went there with bread, cheese and nylon socks, to help. I thought there would be people on the ground, screaming. Instead, I found a splendid city, the restaurants were full. There were paid, while others switched to the ‘no credit insurance, no stock leaving the warehouse’ mode. Expect some decade- long collaborations to go up in smoke.

The future of wine and spirit consumption is debatable. Imported spirits have been badly hit in recent years, mainly due to increased duty. Ouzo and tsipouro are the local spirits that perform well and in a stable manner. Wine is also doing well, although carafe wine and wine sold in bulk is pressuring the market share of bottled wine. Surprisingly, many wine and spirit companies performed excellently during the summer, with top quality products, such as Cristal, showing triple-digit growth. This is mainly down to top quality tourists who love Greece, or Greeks thinking their summer is too precious to get spoiled by IMF et al. I think we will have to wait until October/November to really understand the full effect of the political situation on sales.

It is tricky to say this crisis will result in long-term advantages for the many tourists. You ate well — with €18 or €20.” If you have been to Athens in the past 10 years and you liked it, this will still be the case. You wouldn’t notice a thing, bar some extra ‘for rent’ signs. Stop watching the news. It’s bad for you.

Having said that, the past five years have been quite demanding for most Greeks, and the past two months especially. Capital controls and closed banks stressed the market to the max. Retail trade, mainly in non-tourist areas, came to a complete halt. Most citizens, apart from pensioners, were allowed to draw off the ATMs E60 per day, per account, which comes up to a respectable E1,800 per month, plus debit cards and e-banking working as usual for national transactions. The really tough times were for companies not being able to pay suppliers overseas. This affected all the drinks industry, from wineries unable to buy corks and bottles to importers trying unsuccessfully to stock up on chablis and champagne.

Some suppliers supported business partners by shipping orders without being aware when they would get Greek wine and spirit industry. Tricky in the sense there are many people in Greece nowadays living far below the poverty line – particularly elders – who have no hope, no chance to react to what is happening around them.

Having said that, Greeks will be better businessmen in coming years. They will select their battles and pick their friends more carefully. They will work harder to make their offerings more meaningful. Wine and spirit producers will focus more on exports, something that should have happened decades ago. They will need export skills and will get them through better executives. The recent successes in student numbers at the Wine & Spirit Professional Centre, the Greek arm of WSET, is a predication to that. Greek wines and spirits will thank this crisis in time.

Going back to the 70% of a crisis being psychology, I am tempted to say that, if such a crisis had to befall a European country, then EU is fortunate this was Greece. The effects of a crisis of that magnitude in many other countries would be devastating and lasting generations. So no worries. Greece will take one for the team.