Economists estimate that the Greek economy has shrunk by at least 25% since it entered a prolonged recession in 2008. That’s hit companies hard and many family businesses have been at the sharp end of dire economic situation. It’s estimated that 75% of the private sector is family controlled, with most of these businesses employ just a few family members. But Greece has also given rise to the concept of shipping dynasties - made famous by the legendary Aristotle Onassis.
Unsurprisingly, the role of Greece’s biggest dynasties in the local economy has come under question. Some commentators have suggested the bigger ones have contributed to the dire economic plight of the country. Whether that is the case or not, the revival of the Greece economy needs to be driven by the private sector and family businesses will play a big role in this.
Family Capital looks at five Greek family business dynasties - and how they have fared under the economic meltdown.
Vardis Vardinogiannis is one of the country’s most successful entrepreneurs, where, from humble beginnings in Crete, Vardis built up a multi-billion dollar oil refinery business called Motor Oil (Hellas). As with most of the big family dynasties in Greece, the Vardinoyannis family has a multitude of cross-holdings in other businesses - in their case, media and shipping interests. Vardis’ eldest son Giannis has taken the various businesses a step further up the food chain and has become one of the richest Greeks as a result. Early this year, Giannis expressed confidence in the current far-left government of Alexis Tsipras. The latest figures for the refinery business shows strong growth in revenue and profits, but the other businesses owned by the family are exposed more to the local economy and will be taking a hit.
Arguably the family most exposed to the economic meltdown are the Costopoulos’. The family’s wealth is linked to one of the biggest private sector banks in the country, Alpha Bank, which was founded in the late nineteenth century by John Costopoulos. Although they only own a small interest in the bank, over the years it has enabled them to build up a sizable fortune. The honorary chairman of the bank Yannis Costopoulos is estimated by the Greek rich list to be worth more than $400 million. Nevertheless, with the banking sector stretched more than ever, the Costopoulos family are probably a little concerned about their exposure to the run on bank deposits currently happening in the country.
Spiro Latsis is the second wealthiest man in Greece, according to Forbes, with a fortune estimated at $2.4 billion in 2015. The money comes from banking, shipping and real estate. Much of the fortune is linked to a banking empire, including the Greek retail group Eurobank. Like Alpha Bank, Eurobank earlier this year applied for emergency funds from the European Central Bank. No doubt the Latsis family have a great deal of their money invested abroad, but they will be currently extremely concerned about the crisis in their country and how that is affecting their local holdings.
Canellopoulos and Papalexopoulos families
Two families but one major company, the Titan Cement Company, which has been run and owned by them since 1902, and the two families own 40% of the company. Andreas Canellopoulos is chairman of Titan and Dimitrios Papalexopoulos is its managing director. True to form, members of both families are linked to a host of other businesses in Greece through cross-holdings and directorships. Understandably, the cement business isn’t doing particularly well in Greece at present because little new construction is underway. Nevertheless, Titan still gets a considerable amount of its revenues from outside of its home base, which should enable the family to see out the crisis without serious problems.
Viohalco, one of the world’s biggest metals mining and trading businesses, is run by brothers Nikos and Evangelos Stasinopoulos. Viohalco employees more than 8,000 people worldwide and has seen its revenues rise in recent years, despite the downturn in the local economy. But a few years ago, Viohalco decided to shift its headquarters and stock market list away from Athens to Brussels over concerns about the local economy. This move is indicative of the capital flight happening in Greece, whereby a considerable amount of money has left the country for safer havens.