Voluntary Report - public distribution

**Date:** 3/15/2006

**GAIN Report Number:** GR6003

GR6002

**Greece**

**Market Development Reports**

**Doing Business in Crete**

**2006**

**Approved by:**

![](media/image1.wmf)Robin Gray

U.S. Embassy Rome

**Prepared by:**

Danae Synodinou

**Report Highlights:**

Crete is the largest Greek island attracting about 4 million tourists a
year, out of a total of 15 million tourists visiting Greece. Crete
therefore offers good potential for U.S. origin food products, providing
distribution difficulties can be by-passed.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Rome \[IT\]

\[GR\]

General Information on Crete

> ![](media/image2.wmf)Crete, is the largest of the Greek islands, the
> fifth largest island in the Mediterranean sea, separating the Aegean
> from Libyan Sea. With a population of approximately 601,000 people,
> Crete is 256 km long, has a total area of 8,335 square kilometers,
> including a great variety of landscapes. Majestic mountains in its
> center, fertile valleys and sandy beaches, including Europe's only
> palm forest, clear water, archaeological sites, along with the famous
> Cretan hospitality and healthy cuisine (Mediterranean diet) makes
> Crete one of the top holiday destinations in the world. Crete receives
> approximately 4 million tourists per year; more than half arriving

Map of Greece

on charter flights. The region has a good transportation network, with
three international airports and harbors in each prefecture.

Over three-quarters of Crete's gross domestic product comes from
services, while the tourism industry contributes 13 percent. The island
hosts a total of 11,200 retail businesses with a combined turnover of
approx \$2.2 billion. There are 8,700 businesses in tourism, including
catering, with a turnover of \$1 billion. The primary industries include
biological agriculture (olive oil, tomatoes, potatoes, citrus fruits,
wine), followed by food and beverage production, and textile
manufacturing. Crete produces 8.4 percent of the total Greek
agricultural production, 26 percent of secondary production and 5.8
percent of total Greek services. Thirty-three percent of Greek olive oil
is produced in Crete. In addition, Crete is known for honey, raki (local
alcoholic beverage) and a variety of spices and herbs.

![](media/image3.jpeg){width="1.6597222222222223in" height="2.0875in"}

Crete has four prefectures. From the west to the east these include,
Chania, Rethymnon, Iraklion and Lassiti. The biggest cities in Crete are
Chania, Rethymnon, Iraklion and Agios Nikolaos. Iraklion is the business
and social center of Crete and the fifth biggest city in Greece.
Iraklion was the ancient port of Knossos, the prominent city of the
Minoan era. Chania is the second largest town in Crete. The old
character has remained more preserved in Chania than in any other town
in Crete. Rethymnon is a charming and traditional city with a clear
historical presence in the town. Finally, Agios Nikolaos is the eastern
tourist center of Crete and combines modern facilities and the past. On
the southern end of the island, Hersonisos, attracts the majority of
tourists. From a historical perspective, Hersonisos is the most
significant of the

Prince of the Lilies

Greek islands since culture developed there with the Minoan
civilization, over 4000 years ago.

Investment potential lies in biological agriculture, in the industrial
food sector and in tourism, which offers great investment potential for
the development of alternative tourism.

# Crete's Tourist Profile

#  

Tourism is one of the main sources of income and employment in Crete.
According to National Tourist Organization (NTO) data, Crete has 1,523
resorts and hotels with 145,139 beds, approximately 5,300 beds belong to
five-star hotels, with about a 75 percent annual occupancy rate.

![](media/image4.jpeg){width="3.03125in" height="2.0104166666666665in"}

In addition, it has 3,138 pensions with 53,907 beds, making a total of
204,310 beds available on the island. The tourism sector employs
approximately 18,000 people, compared to 4,000 people in 1971. Of the 4
million tourists visiting Crete, 23 percent are Germans, 19 percent
English, followed by Scandinavians and French. Greeks, comprise about 10
percent of total tourists visiting Crete, and their visits are
predominantely in August. The tourist season is primarily April until
early November, with a few resorts open all year round. Although there
is an available margin to increase the number of tourists, efforts are
primarily focusing on improving the tourist product currently offered by
renewing facilities, upgrading services, and developing alternative
tourism, such as convention, health, agrotourism and cultural tourism.
Both will contribute financially in the development of the island's
product and extend the season. Convention and health tourism, including
"thalasso", result in a guest per capita accommodation which is much
higher than regular summer guest accommodation. In Crete there are
approximately 78 conventional centers, which is about 35 percent of the
country's available convention centers.

Currently, many resorts and hotels in Crete operate as all-inclusive
hotels; providing meals, snacks, drinks, and activities for children.
The five-star hotels include these basics in addition to golf, water
sports and spa.

Crete's natural beauty and its cities throbbing with life, elegant
shops, traditional restaurants, local cuisine, accompanied by genuine
Cretan wine and the characteristic local drink "raki", a strong
alcoholic drink made of choice mulberries, ensure Crete will remain a
strong player in the world's tourism. Crete is also open to imported
food products and food ingredients.

# Food Retail in Crete

In Crete there are 11,158 retail businesses, 3,231 of which are in the
food trade. The average turnover of the biggest food retail stores,
(approx 1,285), is more than \$387,000. There are 149 supermarket
outlets, 102 of which belong to supermarket chains. Careffour, Dia, and
Lidl are present in Crete, in addition to Chalkiadakis (Veropoulos
Group), and other local chains. Lidl entered into the Cretan market in
2005 and now has 7 outlets all over the island.

+-------------------------------------------------+---------+----------+
| DEVELOPMENT OF SUPERMARKET SECTOR IN CRETE      |         |          |
|                                                 |         |          |
| (2000-2004)                                     |         |          |
+-------------------------------------------------+---------+----------+
|                                                 | *       | **2004** |
|                                                 | *2000** |          |
+-------------------------------------------------+---------+----------+
| Chalkiadakis (Veropoulos Group)                 | 26      | 29       |
+-------------------------------------------------+---------+----------+
| INKA (local chain)                              | 15      | 26       |
+-------------------------------------------------+---------+----------+
| Carrefour                                       | 22      | 19       |
+-------------------------------------------------+---------+----------+
| Mamalakis (local chain)                         | 6       | 6        |
+-------------------------------------------------+---------+----------+
| Dia                                             | 1       | 3        |
+-------------------------------------------------+---------+----------+
| Others                                          | 14      | 19       |
+-------------------------------------------------+---------+----------+
| TOTAL                                           | 84      | 102      |
+-------------------------------------------------+---------+----------+

Source: Panorama of Supermarkets, 2005

Forty of the total one hundred and two supermarkets are located in the
Iraklion prefecture. In addition, all over the island there are about
342 convenience stores with an annual turnover of \$121,000, while the
146 kiosks record annual sales of more than \$242,000. OLA, convenience
store chain, entered the market in February.

![](media/image5.wmf)Consumers in Crete are traditional in their
preferences favoring local products and shopping at dedicated food
stores, which have managed to survive the competition from the big
supermarkets. Economic recession and socio-economic changes, coupled
with discounts offered by supermarkets are threatening the smaller
shops. However, for the time being the medium-sized, family-owned
enterprises in Crete are keeping a significant market share.

# Distribution Channels -- Opportunities for Imported Products

Local wholesalers and distributors handle the imported products trade in
Crete. There are very few traders who import directly, similar to other
parts of Greece. Several Greek importing companies, located in Athens,
have branches in Crete. In addition, there are four or five wholesalers
and distributors that operate on a prefecture basis in the Iraklion
industrial area, and maintain efficient distribution channels all over
the island. These businesses supply both the retail and the hri sectors.
As a market for imported products, Crete is still small relative to its
needs, especially for the hri sector. Competition comes from local
products.

Wholesalers/distributors submit offers, including offers for food
products, once a year to the Hotel Purchasing Managers, to cover hotel
needs for the upcoming tourist season. Purchasing Managers tend to be
unaware of the varied and innovative U.S. products available, and
instead rely on the wholesaler's product availability. This is a
challenge for U.S.-origin food products.

To enter the Cretan market, it is very important to have an agent in
Greece. Most wholesalers/distributors in Crete prefer to buy products
already available in the Greek market, rather than initiating import
procedures themselves. Demand in Crete is mostly small quantity and
seasonal.

The following chart provides the market structure for imported products.

The FAS Office in Athens maintains a list of potential importers as well
as one of local wholesalers and distributors in Crete.

# Best Product Prospects for both hri and retail sectors:

♦ Frozen Foods, including vegetables, seafood, meat and dough

♦ Tree Nuts

♦ Wine

♦ Beer

♦ Beverage mixes

♦ Food ingredients

# Contact Information

For additional information please contact the Foreign Agricultural
Service Office in Athens at the following address:

Foreign Agricultural Service

American Embassy

8, Makedonon Str.

GR-101 60 Athens

Tel. ++30-210-720-2233,Fax: ++30-210-721-5264

[Email:AgAthens@usda.gov or]{.underline} <fasgr@ath.forthnet.gr>

FAS home page: [http://www.fas.usda.gov](http://www.fas.usda.gov/)