The temporary 0% VAT on essential foods in the first half of the newly launched year reignited an ongoing dispute among Canarian importers and the AIEM framework (Import and Delivery Tax on Goods). Industry representatives argue that the government under Pedro Sánchez has widened the price gap between Canaries and the mainland, making everyday groceries more expensive for island shoppers. For instance, a yogurt that costs 11% more on the mainland now carries a 15% premium in the Canaries.
The four-point price differentials in this context are driven by indirect taxes, with VAT applying across continental Europe, a policy set by the central administration in recent weeks. Mainland consumers faced a 4% rate up until December 31 for items like the aforementioned dairy derivative. On the islands, IGIC has long offered relief, while AIEM maintains a 15% charge. The Canary Islands Importers Association (Adican) emphasizes that the gap between the two markets—fifteen percent minus four percent, from the start of 2023—remains pronounced.
The same pattern appears for other products, such as eggs or onions. When it comes to pasta, the divergence grows even wider, moving from a five-point gap previously to as much as thirteen points in certain cases.
AIEM functions as a fiscal instrument that, in its essence, promotes local Canarian production. It is designed to increase the cost of goods imported from outside the archipelago, thereby making locally produced items more appealing to consumers. The sector closed November with 39,326 jobs distributed across 2,867 companies registered with SGK. It contributes roughly 7% to 8% of the autonomous community’s gross domestic product.
Pedro Peña, president of Adican, does not agree with this assessment. He notes that after two decades, products with a market share exceeding 90% that are not produced locally have entered the AIEM list, even in domestically produced forms. He states that the objective is not to protect anyone but to increase revenue.
From this perspective, the idea that a single European market could justify higher household spending is viewed as untenable. Critics add that distribution costs have risen due to international freight pressures intensified by the post-pandemic expansion of global logistics networks.
Importers warn that inflationary pressures were already evident before the invasion of Ukraine. They argue that Russia’s conflict exacerbated energy costs and the price of raw materials like grains, accelerating overall price increases. They also contend that altering the AIEM would reduce state revenues for the Canary Islands and is therefore unlikely to occur.
The prospect of rapid changes to IGIC faces the hurdle of needing Brussels’ approval. The current policy window covers the period 2021–2027, with periods requiring the Canary Islands government to report to the European Commission to document outcomes.
“We do not expect 2024 to bring fluctuations that ease the impact; this has been a long-standing situation and it has never felt this severe,” Peña says. “If any AIEM-protected product remains, it is because it is no longer produced on the islands and still faces pressure.”
Grisaleña: “We Are Second Class”
Historical importer Sebastián Grisaleña, founder of Grisaleña SL and former president of the Confederation of Businessmen of the Canary Islands, is candid in his assessment. He contends that the Canary Islands are “second-class Europeans” by virtue of being the only EU region with a tariff like AIEM for imported goods. He points to rising fiscal pressure perceived as lacking respect for the Canaries and criticizes the recurring political responses to AIEM, arguing that transparency has always been a sore point in the system’s history. Independent economists have repeatedly suggested greater openness as a way to calm the debate.