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The ‘hyper’ question the controversy of the margins: “There was never any cheating or cardboard”

Date: June 19, 2024 Time: 13:16:07

The controversy over the increase in business margins has stirred up the business community in the distribution sector, which had been warning for months that the supposed extraordinary benefits that various ministers of United We Can wielded were not real. The publication of the first Observatory of Business Margins that the Ministry of Economy has released this Tuesday reflects how the impact of inflation on raw materials directly affected the margins of food distribution, which remain below their historical averages. Thus, they break with the critical discourse of Ione Belarra, Irene Montero and Yolanda Díaz, who came to propose the creation of public supermarkets as a form of intervention in this market.

Aurelio del Pino, president of the Association of Spanish Supermarket Chains (ACES), has lamented the pressure from some members of the Government and the reflection that they have had in the form of a public debate after “things have been said that were not supported by not have detailed information. This entity, in which large chains such as Alcampo, Carrefour, Supercor or Eroski are integrated, defends that “it is not the fault of the distribution, which every day pays more for what it buys from the food industries”.

The first Observatory of Margins concluded that the increase in the cost of raw materials that make up the food chain had a very negative impact on margins due to the high costs of fertilizers or energy, something that resulted in a 25% drop in margins . At that time, the price increases were below the cost increases, although these margins began to recover during the first months of this year, reaching their pre-pandemic levels but below the historical average.

“Companies have tightened their belts”

“There was no cheating or cardboard, you can’t prosecute the whole problem, you have to see the causes one by one with a detailed analysis,” says the speaker of the ‘hyper’ in conversation with La Información. Del Pino defends that companies “have not recovered margins and they have all had to tighten their belts”, and that they feel “very uncomfortable” in the political debate because they prefer to “defend themselves with data and regulate certain things so that they work better, always from our point of view”.

The president of the entity assures that the data has always been public and that, despite the pressure from the Podemos ministers, they have “always” found the support of the Ministry of Agriculture, in the hands of the PSOE: “Planas has always given an explanation real,” he explains. In this regard, he defends that “no country in the European Union has more exhaustive information than Spain in terms of data from the agricultural or livestock sectors, with daily prices of how much is bought and sold.”

The government already admitted in one of its finalizations of the Reception Plan that it sent to Brusalav the largest proportion of food waste and was due to exogenous factors, such as energy or the consequences of the Ukrainian war, something that Del Pino hopes will serve so that the debate on the margins of the distribution is buried: “It has been revealed”, he assures.

Regarding the high costs of food, he explains that “food inflation continues to cause resistance to lower prices”, and for applying measures such as the reduction of VAT on meat and fish, paralyzing the tax on plastic or reducing regulatory costs, which he classifies as “extremely high and very uncomfortable”.

Cepyme questions the Observatory report

The Spanish Confederation of Small and Medium Enterprises (CEPYME) has classified the publication of this new Observatory of Margins as “counterproductive for business culture” because it “tries to stigmatize the achievement of business profit”, as reflected in a statement. The employers’ association of SMEs questions that the report is based on data from 1,000 large companies, something that “does not represent a complete sample of the Spanish business fabric, which is made up mainly, 99.8%, of SMEs.”

Cepyme also questions that the relationship used in the study does not take certain costs into account. Specifically, it alleges that the organizations that developed the study (Ministry of Economic Affairs, Bank of Spain and the Tax Agency) make use of the Gross Operating Result as “the variable that best approximates the accounting concept of Ebitda. This, in the opinion of the employer, “does not include the cost of investment and amortizations, rising financial costs, impairment of assets or payment of taxes on profits.”

The employers’ association of SMEs demands “that the Government of Spain assume an attitude of defense of the Spanish business community” and ensures that this observatory “will be perceived as a future interference in the freedom of business and in the proposal of benefits”.

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