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Sitting in his office, Mr. Politopoulos took a long pull from a glass of his premium Vergina wheat beer and said it was absurd that he had to lobby Greek politicians to repeal a 19th-century law so that he could deliver the exports that Greece urgently needed. And, he said, his predicament was even worse than that: it was emblematic of the web of restrictions, monopolies and other distortions that have made many Greek companies uncompetitive, and pushed the country close to bankruptcy.<\/p>\n
\u201cWhy do you think no one is willing to invest in Greece?\u201c he asked. Greek leaders say they welcome business, he said, adding: \u201cYes, they are trying \u2014 but they have to back it up.\u201d<\/p>\n
For decades, Greece has been a wonderful place to be a lawyer, a pharmacist, an architect, a university president or even a truck driver\u2014 all occupations protected by an array of laws that have shielded them from local and foreign competitors. Greek pharmacists are guaranteed a minimum profit on their sales and charge some of the highest prices in Europe. And because they have fixed minimum fees, the 40,000 or so lawyers in Greece receive more for their time than their peers in many other European countries.<\/p>\n
It has been very profitable to be a brewer in Greece, too \u2014 if you control 72 percent of the beer market, as Heineken now does.<\/p>\n
The Greek economy is riddled with distortions \u2014 the number of trucking licenses has remained unchanged in Greece since 1971, for example, and the country is among the world\u2019s leaders in lawyers per capita. It has one lawyer for every 250 people, compared with about one for 272 in the United States.<\/p>\n
The effect on Greek competitiveness could not be more pernicious.<\/p>\n
The cost of labor in Greece from 2005 to 2010 has been, on average, 25 percent higher than in Germany, according to a recent analysis by Variant Perception, a research firm based in London. (Ireland, Portugal and Spain also have relatively high labor costs.) Quite simply, Greece has had trouble producing goods and services that people want to buy \u2014 a result being a persistently high trade deficit that even now, amid the deepest of recessions, has hardly budged.<\/p>\n
This pricing distortion helps explain why Greece required a 110 billion euro ($150 billion) bailout last spring in order to keep it from defaulting on its debts. The problem kick-started the financial crisis that is still shaking the euro zone. Seeking to restore competitiveness, Greece, because it is in the euro, cannot devalue its currency and, like other nations on the zone\u2019s periphery, has instead had to impose what economists call an \u201cinternal devaluation.\u201d<\/p>\n
Instead, the difference in labor costs between countries like Greece and Germany is to be closed by sharply reducing public-sector wages \u2014 a move that is a hallmark of the Greek government\u2019s reform effort. But improving competitiveness by cutting salaries is not only politically painful, it is also time-consuming.<\/p>\n
The International Monetary Fund and the Greek government agree that lasting progress can be made only by instituting reforms that would make it easier for Greek companies to produce export-quality goods. Such measures include cutting taxes, easing the path for companies to win investment permits and \u2014 as entrepreneurs like Mr. Politopoulos hope \u2014 scrapping outdated laws that restrict business production.<\/p>\n
George P. Zanias, the top economic adviser to Greece\u2019s finance minister, George Papaconstantinou, said: \u201cHistorically, the supply side of the economy has been neglected \u2014 it was just a question of increasing demand. Vested interests built up and economic distortions increased.\u201d<\/p>\n
Companies in Greece had grown fat and lazy by selling their products in a protected local economy that was forever stimulated by government deficit spending, Mr. Zanias said. Over the years, Greek companies felt little need to emphasize exports, and the country became one of Europe\u2019s most closed economies, with exports accounting for just 20 percent of economic output \u2014 about half the average for the euro zone.<\/p>\n
Now, with the hard-pressed government unable to borrow and spend as deficits shrink, companies are obliged to sell their wares abroad \u2014 if they can.<\/p>\n
Mr. Zanias points to the positive, like a 40 percent surge in exports in November. He also notes that a law has been passed to speed along large-scale foreign investment projects, and that the Greek cabinet has approved legislation to open the closed professions to competition and thus force them to lower their prices. But the economist in him is mindful of the long-term damage already done to the capitalist initiative here. \u201cGreece has never been an easy place to do business,\u201d he conceded with a sigh.<\/p>\n
None of which is news to Mr. Politopoulos.<\/p>\n
ALONG with his older brother and business partner, Michael, Mr. Politopoulos came to the United States in the early 1980s to get an education \u2014 and, perhaps, to make his fortune.<\/p>\n
He received a degree in chemical engineering and business at the Stevens Institute of Technology in Hoboken, while Michael went to Columbia. The older brother set up and still runs a specialty chemicals business in North Bergen, N.J., while Mr. Politopoulos says he embraced a young man\u2019s life, working hard for his brother and playing equally hard off-hours in Manhattan.<\/p>\n
In 1995 he persuaded his brother and father \u2014 an independent businessman who owns a Best Western hotel in Athens \u2014 to stake his conviction that Greece \u201cwould be an excellent spot to start up a brewery.\u201d<\/p>\n
\u201cFrank Zappa once said that if you want to be a nation you need to have an airline and a beer,\u201d he said. \u201cWell, we had an airline.\u201d<\/p>\n Not to mention the fun he would have.<\/p>\n \u201cI have always loved beer,\u201d he said. \u201cWe just figured that all we had to do is drink less beer than we sold.\u201d<\/p>\n He stopped working for his brother, studied brewing in Chicago and bought a one-way ticket to Greece in 1995 \u2014 choosing an industrial park in Komotini, a midsize town a few hours\u2019 drive from the Turkish border, as the site for his factory.<\/p>\n Mr. Politopoulos, 47, is a bachelor, and at times he acts like an aging frat boy on spring break, as when, for example, he suggests a night of partying with college girls in Komotini. But there is no mistaking the intensity of his business drive and his commitment to make good on the 11.5 million euros his father and brother have invested in him.<\/p>\n \u201cI would rather die than lose that money,\u201d he said. In emerging economies from Brazil to Turkey, South Africa and Mexico, beer companies have spun extraordinary profits. Mr. Politopoulos hoped to replicate this pattern.<\/p>\n In Greece, however, Amstel created an early and dominant stronghold in 1963 via a local company called Athenian Brewery, establishing tight control of the country\u2019s beer distribution channels. When Heineken acquired Amstel in 1968, Heineken took over this position, which, in effect, included a huge barrier to entry for anyone hoping to establish a local brewery.<\/p>\n By the time Mr. Politopoulos set up his company, called Macedonian Thrace Brewery, Heineken\u2019s grip on the market \u2014 then close to 90 percent \u2014 was so all-encompassing that the green color of its signature bottle had become synonymous with beer. (Instead of ordering a Heineken in a cafe, people would often ask simply for a \u201cgreen.\u201d)<\/p>\n When Mr. Politopoulos first announced his plans, the response in Greece was often one of bemusement.<\/p>\n As he recalls it, he would say, \u201cWe are going to make a great local beer,\u201d only to have prospective customers respond, \u201cBut Greece already has a beer \u2014 its called Heineken.\u201d<\/p>\n \u201cWell, yes, but ours will be called Vergina,\u201d named for the town in Macedonia where Alexander the Great\u2019s father was born. \u201cIt will taste great and be cheaper \u2014 give it a try!\u201d<\/p>\n \u201cBut such a beer does not exist,\u201d he says people would then reply, and he would have to start all over again.<\/p>\n \u201cIt was like the twilight zone,\u201c Mr. Politopoulos recalls with a shake of his head. (For the record, Vergina\u2019s premium wheat beer is quite delicious \u2014 sharp and full in taste.) Heineken\u2019s hold on the Greek beer drinker, however, is more than psychological. It is rooted in the profits that Athenian Brewery \u2014 98 percent owned by Heineken International and run by a Dutchman \u2014 produce for the parent company.<\/p>\n Mr. Politopoulos said: \u201cThis is not about money; it\u2019s a matter of principle. There are laws \u2014 you cannot just kill the small guy because you are big and powerful. We make a good beer and we just want the consumer to be the judge, and not our competitors.\u201d<\/p>\n He adds that politicians in Athens \u2014 both conservative and socialist \u2014 seem to understand that the old culture that allowed a dominance of such size and scope is no longer acceptable if Greece is to generate the type of growth it needs to eventually pay down its mountain of debt.<\/p>\n And he has no doubt that once the right people in Athens are made aware of King Otto\u2019s law, as he calls it, it will be erased \u2014 allowing him to produce his bottles of Greek mountain tea.<\/p>\n Evripidis Stylianidis, a former high-ranking minister in the New Democracy Party that lost out to the current socialist government of George Papandreou in 2009, said, \u201cThese types of monopolies are not healthy for Greece.\u201d<\/p>\n Mr. Stylianidis hails from Komotini and has been one of Mr. Politopoulos\u2019s staunchest political backers. He is also a student of a vast array of old laws that, he says, harm businesses in Greece. One favorite example: a decree that protects donkeys, giving them the right of way on Greek roads.<\/p>\n COMPARED with Turkey, Greece has had an extremely poor record in attracting direct foreign investment. And while a bill for putting big investments in Greece on the fast track is now law, there has been little sign that investors are responding in large numbers to this declaration from Athens that Greece is open for business.<\/p>\n Still, there has been some improvement lately, in the view of Achilles V. Constantakopoulos, a shipping industry scion. He is in the process of investing 1.5 billion euros in a series of high-end tourist resorts on the underdeveloped coastline of the southwest Peloponnese region. But this plan was first conceived a good 25 years ago by Mr. Constantakopoulos\u2019s father and founder of the family fortune, Vasilis, who died last week. The plan has suffered numerous legal setbacks. Only recently did Mr. Constantakopoulos complete the first of four planned resorts, Navarino Dunes.<\/p>\n \u201cThere is a problem in Greece,\u201d he said. \u201cIn order to do something it has to be provided for in law,\u201d and that can take decades.<\/p>\n But he says he believes that things are changing \u2014 and that he expects that the fast-track law for large investments will benefit not only his family\u2019s project, but others as well. \u201cThe laws that are in place encourage investment,\u201d he said in his office in Athens, as he nibbled from a plate of figs and nuts. \u201cThese days it is easier to get things done.\u201d<\/p>\n Nonetheless, the grinding work of scrapping old laws and creating an open, commercial climate that attracts foreign investors cannot be completed overnight.<\/p>\n And the clock is ticking.<\/p>\n If current trends continue, by the time the I.M.F. rescue program runs its course in 2013, Greece will be burdened with a debt-to-G.D.P. ratio of close to 160 percent (second in the world, after Japan) \u2014 and a requirement to keep its deficit at just 3 percent of G.D.P.<\/p>\n Without a major restructuring of its debts, Greece can reduce this ratio rapidly only if the economy grows at a rate approaching the 4 percent it averaged before the crisis hit in 2008. Absent government pump-priming, though, Greece must rely on its moribund private sector.<\/p>\n Can Greece reinvent itself and become globally competitive?<\/p>\n The question goes to the heart of the euro\u2019s future. Beyond the drama of debts and deficits, Greece\u2019s growth prospects are indeed dim if it cannot offer high-quality, competitively priced goods and services. Much the same is true for Ireland, Portugal, Spain and even Italy.<\/p>\n In a recent report, Bank of America Merrill Lynch projects that Greece\u2019s growth rate over the next five years will average 1 percent \u2014 a rate that could force the country to stop paying a portion of its debt.<\/p>\n In the meantime, the struggles of the Politopouloses continue. Sitting in an outdoor cafe on a rainy weekday afternoon in Athens earlier this month, Michael Politopoulos, the elder brother, considers the losses the family has absorbed because of the many years it took to bring Vergina to the market \u2014 to say nothing of the heartburn they have all endured.<\/p>\n Sipping from a glass of Chivas Regal \u2014 predictably, the establishment does not stock Vergina \u2014 he says he once considered giving up on the business entirely. Now, with visions of millions of bottles of green mountain tea dancing before him, he is ready to double-down in Greece \u2014 as soon as King Otto\u2019s law is reversed, that is.<\/p>\n \u201cThe ills of the past are crumbling,\u201d he continued.<\/p>\n \u201cGreece has no choice but to rebuild \u2014 and the only way to do it is to roll up our sleeves and start over.\u201d<\/p>\n![\"\"](\"https:\/\/www.verginabeer.com\/wp-content\/uploads\/2020\/07\/to-provlima-tis-elladas-rotiste-enan-epicheirimatia-03-150x150.jpg\")
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