The prices of food and non-alcoholic beverages rose 16.6% in February in relation to the same month of the previous year, to a level that had not been registered since the National Institute of Statistics (INE) began to prepare the monthly series of CPI. This year-on-year increase was higher than the 15.4% that the shopping basket had become more expensive in January and was also above the peak of 15.7% that it had registered in December. In the first two months of the year, coinciding with this strong price increase, the food industry shot up its sales by 20.5% in relation to the same period of the previous year.
This is reflected in the data that the Tax Agency (AEAT) collects through the Immediate Information Supply System (SII), which includes the evolution of sales of companies with a volume of operations of more than 6 million euros, from VAT groups and those of those SMEs and the self-employed that are covered by the VAT Monthly Return Registry (REDEME). According to the information handled by the agency, the average daily turnover of the food industry amounted to 194 million euros in the first two months of this year, compared to the 161 million collected in the same period last year.
Under the umbrella of the food industry are included, according to the National Classification of Economic Activities (CNAE), companies dedicated to the processing and preservation of meat and meat products; those for the processing and conservation of fish, crustaceans and molluscs; those of fruits and vegetables; those dedicated to the production of vegetable and animal fats and oils; the manufacture of dairy products; that of starches and starches, the companies that make bakery products and pasta; as well as those dedicated to producing other food products (cocoa, sugar, spices, coffee, sauces, dishes and prepared meals…)
There is a certain cyclical behavior in food consumption, which tends to increase in times of economic prosperity and to decrease when there is a stoppage or contraction in activity -although less markedly than other goods and services-. Hence, the economists consulted agree that a 20.5% increase in sales like the one that has occurred in the first two months of the year among the large companies in this industry would be largely motivated by the effect of inflation .
An increase in sales greater than that of distributors
From the information collected by the Tax Agency, it can be deduced that the rise in turnover of this group is higher than that recorded by the retail trade sector in non-specialized establishments. The latter, which includes supermarkets and department stores (whose sales are not limited exclusively to products in the shopping cart), saw its daily turnover rise by 13% to 499 million euros on average, compared to to the 441 million of the same period a year earlier.
Concern about the increase in food prices led the Government to test the elimination of VAT on all products that were taxed at a reduced rate of 4% (bread, flour, milk of animal origin, cheese, eggs…) and to lower this tax for oils, including olive oil, and pasta from 10% to 5%. The Bank of Spain, which forecasts that food prices in general will increase this year by an average of 12.2% (four points more than what it forecast in December), estimates that supermarkets have transferred to the final price “around ” to 90% of that VAT reduction. According to the entity, the benefited foods saw their price decrease by an average of 2.5% between December and January compared to the 1% that those who were left out of it rose.
In the midst of the global inflationary crisis -in which Spain remains among the European countries where the general CPI rate rises the least- the debate on business margins has escalated, despite the fact that the large chains continue to defend that they have not high. Thus, the focus has begun to shift towards producers, whose perceived prices have risen by around 30%, according to INE data analyzed by the consulting firm EY. In neighboring France, the Government has reached an agreement with the country’s large distributors – which have a higher market share than in Spain – so that they reduce their margins on a food basket of their choice throughout the quarter.
The transfer of a measure of this type to Spain would give oxygen to the pocket of the national consumer until May, when it could begin to produce a relief in the rise of these basic products due to the so-called base effect – which in the case of energy could begin to be visible as of this month of March- and due to the traditional twelve-month agreement that exists between the S&P GSCI Spot index for agricultural raw materials and the Spanish CPI for food and non-alcoholic beverages.