Ted Diamantis, a importer of Greek wines which is based in Chicago, helps its suppliers source bottles, labels and printing ink. The barrels, however, worry him.
In two or three weeks, some Greek wine regions will begin their annual harvest. Mr. Diamantis’s wineries buy their wine in barrels from Italy and France, but capital controls in Greece make it difficult to send money out of the country to pay for the barrels they need for this season. No barrels, no wine for Mr. Diamantis.
“Without the ability to access your capital, you can’t buy anything,” said Diamantis, who is in Greece to meet his business partners. “The market is frozen. »
American companies that import Greek products have been grappling with uncertainty for a month. Export shipments still leave the country, but The Greek debt crisis Disrupting its supply chain in ways both significant and subtle, threatening the livelihoods of Greek traders and their distant trading partners.
“The Greek domestic market has dried up,” said Jim Tsiboukis, who imports Greek wine and food at its warehouse in San Jose, California. “My suppliers rely on exports, but they cannot obtain the materials they need to package their products. This will slow the economy down to nothing.”
Mr. Tsiboukis estimates that he has three months of stocks, but every day that Greek capital controls very strictly. restrictions on international money transfers – staying in place eats into its margin of safety. The olive oil producer he buys from has been unable to import the bottles he needs for his oil, and his winemakers are scrambling to procure supplies like yeast, bottles and equipment.
United States imported 1 billion dollars Greek goods last year, many of which passed through small family businesses like Mr. Tsiboukis’s. Greek products account for about 10 percent of his company’s $24 million in annual sales.
Some businesses are having to juggle finances and payments to get around Greek restrictions. As Greece’s banking system paralyzed, Mr. Tsiboukis’s suppliers asked him to stop sending money into the country. Those with accounts in other countries – Cyprus is a popular choice – have redirected their bill payments.
Jeremy Johnson’s sellers made the same choice. His family’s import business, Encore Foods in Hingham, Massachusetts, is delaying payments from several vendors who open accounts outside the country.
“They have more confidence in us right now to keep their money than they do in their own banking system,” he said.
The Greek economic crisis is the most extreme problem Encore Foods has faced, but the import sector still faces challenges, Mr. Johnson said. Supply shortages, dock strikes, customs delays and shipping problems are common, especially in Europe. Encore has not yet experienced any delays in its shipments from Greece, but Mr. Johnson is increasing its order volume to build a reserve in its inventory.
Concerns about Greece are starting to trickle down to its customers. One of its buyers, an e-commerce company that sells international products, recently canceled a promotion planned for 2016 featuring Greek products.
“They said, ‘You know what, I’m going to focus on another country,’” Mr. Johnson said. “They didn’t want to put everything together and suddenly realize they couldn’t get any more products from Greece.”
Many U.S. importers with personal ties to Greece say watching the crisis ravage the local traders they work with is one of the most painful costs.
Monica Dreger, whose mother and husband are Greek, is the creative director of CultureBaby, a children’s boutique with international products. National sales have collapsed for the jewelry and home decor designers she works with; few Greeks can afford such luxuries. A shoemaker she buys from is facing increased competition from discounters trying to capture a share of the export market with rock-bottom prices, and the materials the designer needs to make her handmade sandals are rare.
“For me, it’s not a problem, because she will find new materials and make some modifications to the sandals to make them fit what she has,” Ms. Dreger said. “But for her part, she has to do double work and she earns less money.”
The Greek economy is heavily dependent on imports, and the current crisis has revealed how many elements of its supply chain no longer exist domestically. Mr. Diamantis, who spends about four months a year in Greece, started his wine business in 1992, nine years before Greece adopted the euro. This decision reshaped the Greek industrial landscape.
“All the industries that supplied this small but efficient market have disappeared,” he said. “Once we became part of a larger economy, small suppliers were no longer able to compete on a global scale. »
The wineries he works with rely on Italian glass and German machinery. Greece no longer makes the paper it needs to make wine labels or the ink to print them.
Efstatthios Martinis, the owner of Kalamata Food Suppliers, an import company in Hayward, Calif., is about to send a wire transfer to Italy to buy the bottles its Greek supplier needs to package its olive oil. Doing business in Greece is becoming increasingly expensive, he said. new taxes pile up and imported supplies become more expensive.
The turmoil in Greece has eased somewhat since mid-July, when the European Union approved a bridging loan that allowed Greece to make two crucial debt repayments, but its economic outlook remains bleak. The prospect of Greece leaving the eurozone persists, a decision by the country’s government secretly prepared as an emergency plan.
Switching to a new drachma would be “a whole different ball game,” Mr. Martinis said. The cost of Greek goods would fall quickly, but producing and shipping them outside an economically isolated country would be a logistical nightmare.
Even if the situation in Greece stabilizes, the damage will be immense.
“When I speak to our partners, there is a sadness in their voices at what is happening to their beloved country,” Mr. Johnson said.
Greek importers have spent years building the country’s image abroad, and Americans have fell in love with products like Greek yogurt, said Mr. Diamantis. He fears that all progress will be wiped out by the perception of the Greek people as imprudent debtors.
“We must protect Greece’s image and send the right message,” he said. “This crisis that is occurring is not a crisis of bad culture. This is bad governance. It’s like a drug dealer and an addict. Who is to blame? Europe has been so willing to lend money and sell to Greece. Now, all of a sudden, in the last couple of years, you see people looking around and saying, “We have nothing left.” »