Supermarket prices are still rising. / m. salguero

Supermarkets in Spain call for government action in order to keep prices down

Asedas, the association whose members include Mercadona, Dia and Lidl, says costs have doubled and electricity is now the biggest expense

EDURNE MARTÍNEZ Madrid

With inflation at its highest rate for 30 years (9.8% in March and 8.4% in April), supermarkets in Spain are calling on the government to take urgent measures to stop prices rising so much. Asedas, an association whose members include Lidl, Mercadona, Dia and Ahorra Más, among others, is asking for the rate of IVA (Spain's value added tax) to be lowered amid fears that consumption will drop sharply.

Consumption by families had already fallen by 3.7% in the first quarter of this year, according to the National Institute of Statistics, and the situation could get worse.

“Our main concern is the impact that rising prices are going to have on consumers, who have already been hit hard by the effects of the pandemic,” says the letter sent by Asedas to the government this week. It argues that the authorities need to do their part by reducing taxes on basic products.

Also with regard to taxation, the association is asking for an immediate reduction in the regulatory costs that supermarkets have to bear, for example on environmental issues such as plastic packaging or the installation of electric charging points. It says these measures could be postponed so they do not increase further the major costs the companies are having to meet at the moment. It is also calling for a moratorium on the application of charges for items such as water and fluorinated gases.

Electricity is now the biggest expense

Asedas, which represents more than 20 supermarket chains with 19,000 stores, complains that costs have doubled, especially because electricity is now their biggest monthly expense. This is why it is calling for the new cap on gas prices approved by the government to come into effect as soon as possible, and wants a ‘major essential consumer’ scheme to be drawn up so supermarkets can access more flexible and advantageous contracts with electricity suppliers.

The association also points out that although the weight of energy costs is very high for supermarkets, their percentage of total costs does not enable them to be considered an electro-intensive sector and therefore benefit from discounts.

“With the present situation, where electricity costs are rising exponentially, many of our companies see their sustainability or the viability of their businesses compromised in the short to medium term,” it said in the letter to the government.

It is also asking for the EU to temporarily suspend or limit the taxes associated with contaminating emissions and for the sector to receive EU funds urgently to install renewable energy plants in their logistics and commercial facilities.