Yolanda Díaz, the Second Vice-President and Minister of Labor, offered in September last year a basket of essential products at affordable prices, citing Sarkozy’s France as an example. industry rejection -supermarkets from big to small-, criticism from the socialist wing of the coalition government and even the unusual response of the National Markets and Competition Commission (CNMC) reminding the minister that: The law does not allow the setting of prices. Six months later, the neighboring country is in the news again as it has ‘agreed’ with its distribution chains to offer quarterly discounts on certain products. What are the differences between both countries?
VAT reduction and control
Unlike in France, in Spain, the Government approved last December to reduce VAT on basic products from 10% to 5%, and from 4% to 0% on pasta and olive oil. 200 euro check for vulnerable families (with less than 27,000 Euros per year). In addition, it is necessary to add others. reduce energy billsuch as capping gas prices in the electricity market or cutting the income from extraordinary income from nuclear and hydroelectric power plants that can cover some of the costs.
However, according to statistics from the USA, these measures did not prevent the 15% increase in food prices. National Institute of Statistics (INE). In terms of retail, core products with reduced pricesbut what they can’t make up for the rise of others It makes a shopping cart more expensive, according to a four-person weekly shopping simulation by El Periódico of the Prensa Ibérica group. According to the calculations of the Financial Users Association (Asufin), the basket average of the five large stores (Mercadona, El Corte Ingles, Carrefour, Alcampo and Dia) rose 1.31% to 39 cents. From the Government, Minister of Agriculture, Fisheries and Food, Luis Planasargues that the rise in costs has “reached the ceiling” and the price cut is about to fall. Financial Users Association (Asufin)
“voluntary” agreement
a french ad “voluntary” agreement to lower prices some companies. Actually one of the biggest leclercaccording to reports, he did not agree with accusing the rest of “advertising” Enric Bonet. The Minister of Agriculture, who learned about the agreement, Luis Planasapplied national supermarkets to take a “similar measure” even though they have turned their backs. They confirm from major distribution employer AECOC that the French proposal “has nothing to do with what has been proposed (by the Spanish Government) so far”. The sector said the French announcement, which included a photo of the companies with the finance minister, bruno lemaire– there is more than one staging What reducing effect on consumers’ pockets. Meanwhile, First Vice President and Minister of Economy, Nadia Kalvinoassumed that these multinational groups which has a presence in both countries — the most obvious case, Carrefour— will stretch offer too to spainAs stated in the press conference held after Council of Ministers, and the Minister of Agriculture, Fisheries and Food, Luis PlanasHe appealed after the announcement by the French to Spanish companies. perform a “similar” action.
less concentration
The distribution model between the two countries, among other things, Lower workload in Spain. according to incoming data Weighbridge World Panelyes in france three supermarket groups (Carrefour, Leclerc and Les Mousquetaires) dominate. 58% of market share; inside Spain the distribution is much larger seven companies This corresponds to a 56% representation: Mercadona, Carrefour, Lidl, Dia, Eroski, Consum and Alcampo. This greater fragmentation creates greater competition that strains Spanish companies. set your prices further causing consumers to switch businesses looking for the best offer. It is a good thing for consumers as it is synonymous with best prices According to a study by — EurostatIn figures for mid-2021, average food price In Spain it was two points below the European Union average, in France it was 11 points higher, but it also results in a lower average. maneuvering area in times of high peaks like now.
margins issue
From the food industry in Spain, they argue: increased prices because of higher production costs and not business margins. “It is clear that there is no increase in operating margins. relationship between them industrial increases and consumer prices The retail and consumer partner, in a food forum held at the Congress of Deputies, reflects a difference of 31.7 percent, which is roughly the gross added value of the wholesale distribution sector.” EY advisor, José Antonio Latre Ballarín. An OCU report (September 2022) supports the same thesis, stating that retail distribution chains are increasing their prices “in line with inflation.” Mercadona, Dia, Consum and Eroski top gainers due to their low margins and Ahorramás and Alcampo from those less first link of the chain —farmers and ranchers— higher costs are permanent Due to the increases in inputs such as interprofessional minimum wage (SMI), energy prices, plastic tax or some increase materials. It remains to know what will happen business benefits supermarkets when they close their annual accounts. Mercadona They will release it next week. In the example of France, Carrefour earned 26%, up to a total of 1,350 million Euros in 2022. price increase in key countries, including Spain.