Government receives price cut pledge from food chain representatives
Spain's Minister of Agriculture, Luis Planas met with supermarket, distribution and farming sector bosses after recent big increases in the cost of the weekly shop were felt by consumers
Monday, 20 February 2023, 22:08
A meeting between Spain's Minister of Agriculture, Luis Planas, and food chain representatives including supermarkets, distributors and farmers ended with a commitment from the sectors to pass price reductions onto consumers, although no official agreement has been signed to back it up.
Planas said in a press conference after the meeting of the Food Chain Observatory that his department will be «vigilant» so that businesses fulfil this promise. He was quoted as saying, «there are objective reasons» for food to «fall in price» and «change the trend» that has led them to record year-on-year inflation of more than 15% so far. The minister said that this increase «has reached its ceiling» after the implementation of the IVA (Spain's value added tax) reduction on certain basic foods on 1 January.
The general director of Asedas, a national trade body of distributors and supermarkets, Ignacio Magarzo, said that «there are reasons to think that the costs that are putting pressure on prices are going to drop in the coming months.»
«The Government's forecast is positive and that will transfer to the consumer», he said after the meeting.
Magarzo has insisted that the food price problem is due «to costs, not margins. It is not a supermarket problem,» he stated. «Producers are receiving more for their products, but that does not mean that they are getting richer because the costs have risen a lot.»
Minister of Agriculture Planas has ruled out, at least for now, the possibility of lowering IVA on meat and fish. «We decided to reduce IVA on the most consumed foods and those that had increased their prices the most. We are going to continue examining alternatives»
Planas also ruled out the United Podemos proposal to subsidise 14.4% of the shopping basket. Food inflation reached 15.4% last month.
Measures adopted so far include the reduction of IVA from the reduced rate of 4% to 0% on bread, flour, milk, cheese, eggs and fruit and vegetables, while pasta and oils went from 10% to 5%. In addition, the period to request the 200-euro food cheque for vulnerable families has already opened, something that almost 900,000 households have already done, according to data from the Tax Agency.
Cristóbal Cano, deputy secretary of the UPA farmers association, pointed out that his sector is not responsible for the rise in prices, but that «the rise in fuel, fertiliser and energy costs means that we are on the verge of viability.» Cano also demanded the extension of the IVA reduction to meat and fish - in addition to other products such as honey, preserves or yoghurts.
The proposal from the United Podemos wing of the coalition government to discount certain products by 14% to compensate for the rise in prices could have a «negative» impact according to the economic vice president, Nadia Calviño «There are measures that can have a negative impact,» even if they are done «with the best of wills.»