By George Lampiris
The presence of the well-known paint company Benjamin Moore in Greece is evolving into a puzzle for strong solvers. This is because despite the fact that the side of the American company Benjamin Moore & Co, has proceeded to the unilateral termination of the contract with its former partner, George Christovasilis, and president of the football team, PAS Giannina, he continues to produce products smoothly. her, according to the report we have at our disposal.
Putting the data in a series, Benjamin Moore, announced her arrival in Greece in 1998, having decided to establish its production in Komotini. This was in stark contrast to the strategy pursued by most paint companies. In other words, to be located near Attica in order to serve their distribution network faster and to have a direct connection with their commercial ports and suppliers.
The joint company of the Americans and Christovasilis
Benjamin Moore’s investment in Greece was a joint venture, with the establishment of a company in which both the American side and the Greek businessman, George Christovasilis, participated. Over the years, Americans have sold their stake in Christovasilis, while granting him the right to produce products under the Benjamin Moore brand. At the same time the company from Benjamin Moore Mediterranean which was its original name, was renamed BM Mediterranean.
Warren Buffett’s Berkshire Hathaway interest company
The news that Benjamin Moore, a company owned by Berkshire Hathaway, of the major investor, Warren Buffett – with an almost absolute majority that reaches 100% of the shares -, gives a vote of confidence in Greece, aroused the interest of the paint market for the period of cooperation between the two sides.
Simultaneously with his involvement in the paint industry, Christovasilis decided to get involved in the field of Greek football, as president and shareholder of PAS Giannina from 2008 onwards, a position he holds to this day. As far as BM Mediterranean is concerned, it is characteristic that during most of its years of operation, its financial results were limited and usually loss-making, without being able to meet the initial expectations.
Stagnation and ever-losing economic uses
Indicatively, we mention that in 2011 its turnover was 7.2 million euros with losses of 606 thousand euros and in 2012 it was 5.77 million euros with losses of 585.27 thousand euros. Coming to more recent financial years, the image of the company is approximately similar. In particular, the financial results of BM Mediterannean appear loss-making in both the year 2020 and the year 2019. The turnover of 2019 was 6.65 million euros with losses of 31.67 thousand euros and that of 2020 was 6.08 million with losses of 199.57 thousand euros.
The development of cooperation between the two sides did not seem to be as expected. According to the information at our disposal, G. Christovasilis allegedly did not adopt the Gennex technology, which is a key element for Benjamin Moore’s products in all countries of its activity. In addition, this technology required additional investments for the upgrade and installation of new production equipment at the Komotini plant.
The cessation of cooperation unilaterally by the Americans
Coming to today, as early as September 2020, Benjamin Moore & Co unilaterally announced that it is terminating its cooperation with Christovasilis, while informing its partners about this development. However, Giorgos Christovasilis’s BM Mediterannean continued the production of BM Mediterranean paints at the Komotini factory, citing the existing contract with the Americans, which expires in 2023. At the same time, it proceeded to lease the company’s factory to the newly established industry. , Colorstyle, 70% of which belongs to the Kyriakidis group. The rent amounted to 2.1 million euros, divided into 7 interest-free installments. In fact, the factory was under a leasing agreement since 2009 between BM Mediterranean and Eurobank Labor Finance Leasing SA, which was transferred in August 2021 to Colorstyle.
Following the above, G. Christovasilis appealed to the Court, requesting to continue producing Benjamin Moore’s products and citing the existing contract. For its part, Colorstyle brought to market the products of the also American paint company, Pittsburgh Paints, a multinational displacement but little known in the Greek market.
The new collaboration with the Vogiatzoglou group and the simultaneous production by Christovasilis
After the end of the cooperation with Christovasilis, Benjamin Moore & Co comes to an agreement with the listed group Vogiatzoglou, officially announcing its cooperation with the Greek company, which undertakes the distribution of its products as an authorized representative in Greece.
Therefore, at the moment, G. Christovasilis continues to produce paints under the Benjamin Moore brand in Greece, at a time when the Vogiatzoglou group officially has the right to distribute them by the American company, following a relevant agreement between the two sides.
The down payment for the acquisition of shares in a Football Societe Anonyme
Reading the latest published balance sheet of BM Mediterranean by Christovasilis, one could stand, among other things, in the remarks of the jurors. They mention, among other things, that in 2010 the company gave an amount of 1.65 million euros as an advance payment for participation in a Football Societe Anonyme after the relevant approval of the general meeting. In the same balance sheet, the juror refers to an amount of 2.38 million euros, which was paid to an executive member of the board of directors for the handling of the company’s affairs, while expressing the reservation for the possibility of its full recovery.
Benjamin Moore & Co’s response to the courts
As for the American Benjamin Moore, he has also filed a lawsuit, filing a temporary injunction against Christovasilis’s company, asking that the factory not be transferred to Colorstyle, to be allowed the precautionary seizure of all movable and immovable property of his company. head of PAS Giannina as well as to freeze its bank accounts. Finally, it has been requested that the use of the displayed indications “BM”, “Benjamin Moore”, or any relevant name be temporarily prohibited.
Source: Capital
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