hit tracker
Monday, March 20, 2023
HomeLatest NewsThe Government cannot find the formula to lower the price of food

The Government cannot find the formula to lower the price of food

Date: March 20, 2023 Time: 18:35:53

The problems with the price of the shopping basket date back to the summer months, when inflammation reached double digits and the Vice President and Minister of Labor, Yolanda Díaz, cannot create a cheap shopping basket on the French model. This initiative led the leader of Sumar even to hold a meeting with one of the main groups in the distribution sector in Spain. However, these threats remained on deaf ears, while five months later, the only measure approved by the Council of Ministers to cut the price of food has been the reduction of VAT on certain products, which has proven insufficient.

The Unidas Podemos space called the tax reduction insufficient from the moment it came to light, although it was not until last week when the leader of the ‘purple’, Ione Belarra, advocated applying a discount of 14, 4% to the basic products that make up the purchase in the supermarket. This initiative has not had any support from the socialist bench, however, Yolanda Díaz has picked up the gauntlet and has opted to intervene in the prices of these foods. The Minister of Labor admitted this Tuesday that within the Government there are “differences” on what is the mode of reaction to the rise of 15.3% in the price of food and also did the spokesman for the UP group in Congress Pablo Echenique .

Díaz has demanded that the Government must act beyond the VAT reduction and has branded as “insufficient” the position of the Minister of Agriculture, Fisheries and Food, who after convening the Observatory of the food chain at the beginning of the week, ruled out taking new measures considering that food inflation “has peaked”. The Minister of Labor has pointed out the “superlative” business margins of the “oligopoly” of the five most important supermarkets and has argued that the Retail Trade Regulation Law protects her intervention. In addition, she has rescued the proposal for a shopping basket “at limited prices” through an agreement with the distributors.

A little later, as if it were a tennis match, Planas has come out against the food companies and has denied that the supermarkets “are getting rich” with the rise in prices generated by inflation. Likewise, he has described the adjectives used by United We Can to refer to the sector as “thick” and unfair. The Socialist members of the Government do seem to have adopted a common position, because the Minister of Finance and Public Function, María Jesús Montero, has recorded in the press conference after the Council of Ministers that there is no data that suggests that the large distributors have increased their commercial margins due to this situation. What has led him to rule out the implementation of a specific tax for them, as already proposed by his government partners.

However, he has refrained from making specific comments about the option to subsidize part of the purchase ticket and has indicated that United We Can is the one who has to demonstrate how it can be viable to carry it out, since it is his initiative. Although, sources close to the minister’s environment express serious doubts that this measure can materialize and ensure that it is not a budget problem, but that its implementation would entail serious difficulties compared to the fuel subsidy that was launched in 2022. In addition, the person in charge of the Treasury has maintained that the Government is especially concerned about protecting local businesses, made up of small and medium-sized companies and the self-employed.

In this sense, he has maintained that the VAT reduction on food “has worked” by stopping “one of the most important elements that contributed to the rise in the CPI and has called for” giving depth to the norm”, that is, giving it a margin of time to observe its evolution and effect in the medium term before proposing other measures Montero has been firm in defending that food distributors have transferred the 4% reduction to consumer prices despite the fact that his partner, the Minister of Industry, Commerce and Tourism, Reyes Maroto, asked the supermarkets to do so, in the spirit of “a shared responsibility”.

In his speech at the forum ‘La Movilidad de Tod@s’ organized by the employers’ association of car and truck manufacturers (Anfac) -in which Díaz has also used- Maroto has assured that “he is not considering the option” of setting prices of first necesity. In addition, like the Minister of Finance, she has highlighted the complexity” that this has from the “legal and economic” point of view. Although she has celebrated the success of the VAT reduction and has expressed her confidence that “they are beginning to moderate prices” after the meeting of the members of the food chain.

This dance of views has also drawn criticism from regular members of the coalition executive. The leader of Más País, Íñigo Errejón, agreed this Tuesday that the results of the distribution chain meeting are “insufficient” and has aligned himself with Unidas Podemos to bet on intervention in the market through the setting of maximum prices. Along the same lines, the spokesperson for EH Bildu in Congress, Mertxe Aizpurua, has criticized that supermarkets do not revert the VAT reduction and has advocated limiting the benefits of distribution chains. While Cuca Gamarra, representing the PP, has called on the Government to apply a discount on the variable tax on meat and fish, as the ‘popular’ proposed weeks ago.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

Most Popular

Recent Comments