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Supermarket chains in Spain investigated over whether they are applying sales tax reduction on basic foods correctly
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Supermarket chains in Spain investigated over whether they are applying sales tax reduction on basic foods correctly

After consumer groups raised concerns, the Ministry of Consumer Affairs has launched the probe to make sure the stores haven't been profiteering from the rising inflation tackling measure

Raquel Merino / Europa Press

Malaga

Tuesday, 27 February 2024, 15:45

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The main supermarket chains in Spain are being investigated over whether they are applying the government's IVA sales tax reduction correctly on basic foods such as olive oil, fruit and vegetables.

The national government introduced the reduction at the start of 2023 as part of a range of measures to fight rising inflation. The country's Ministry of Consumer Affairs wants to ensure retailers haven't been profiteering from the measure and that customers are not being ripped off on essential foods and basic goods.

The ministry has formally requested information from the country’s main retail distributors stemming from complaints received from consumer and user associations reporting possible increases in supermarkets' profit margins in the past year, mainly on foods such as fruit and vegetables and olive oil.

What information has been requested from supermarket chains?

As part of the first phase of the inquiry, the consumer affairs ministry asked the main supermarket and hypermarket chains operating in Spain to provide details of prices that products have been sold in recent months, taking into account the IVA cut.

The ministry also asked for information about profit margins and cost structures of food distribution chains to determine whether or not shoppers have reaped the full benefit of the sales tax reduction.

Any supermarkets found to be in breach of profiteering rules could face fines of up to 100,000 euros for each transgression.

Reaction

Consumer association Facua, which was one of the organisations that has warned the government for months of "suspicious price increases" welcomed news of the investigation.

Facua pointed out that in one of its latest studies, out of a sample of 13 types of food, 10 of them had seen price increases in supermarkets that were higher than those applied at source between January 2023 and January 2024.

The national association of large distribution companies (Anged) maintains supermarkets and hypermarkets are correctly applying the IVA reduction to prices.

"It is a matter that has already been analysed in detail and publicly reported by the Bank of Spain, the National Commission for Markets and Competition (CNMC) and the Ministry of Economy, and all three have agreed that it was applied correctly," it said.

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