Spain’s main supermarket chains on Monday rejected a government proposal to temporarily freeze the prices of a basket of basic goods to mitigate the impact of inflation and instead called for a tax cut. Bad news for the regulars of the races at Perthus and La Jonquera.
The proposal, which sought to strike a deal with retailers to offer fresh produce, including fish, meat and eggs, at a fixed price until January, has drawn skepticism from other businesses and the opposition, who see it as price regulation.
Supermarket representatives, who met with Labor Minister Yolanda Díaz and Consumer Affairs Minister Alberto Garzón on Monday, said they had already applied many discounts and were doing “an extraordinary effort” to avoid passing on higher costs to consumers as much as possible.
The three associations present at the meeting represent the supermarket sector in Spain, including the Carrefour group, Alcampo, the distributor Auchan, El Corte Inglés or Mercadona, the first chain in the country with a market share of 25%. “If you try to set a fixed price for the baskets, you try to distort the relationship between the distribution companies themselves and the suppliers”said Javier Millan-Astray, head of the National Association of Large Retail Companies (ANGED).
The latter, on the other hand, call on the government to reduce the VAT on certain products. Carrefour said last week it would offer Spanish consumers a basket of 30 basic products for 30 euros, but that was before the government’s proposal and it did not include the fresh produce the administration wants to see on the list. Inflation reached 10.3% over one year in August in Spain.
