Governments in both Canada and the United States are watching inflation pressures closely as they consider new steps to curb food price growth. In France, major supermarkets recently began positioning baskets to counter inflation, and in Spain the debate resurfaced as the consumer price index rose to 6 percent in February, driven by food. The ruling party in Spain and its coalition partners say they will wait to see if measures such as a VAT relief and a 200 euro check are approved before deciding on further actions. Unidas Podemos and other parliamentary allies urge the government to step into the market and extend VAT relief to meat and fish.
The Ministry of Agriculture, Fisheries and Food announced that Tuesday would be the deadline to assess February inflation data and act accordingly. Officials said the government paused a sharp January upturn and is still evaluating what happened in February. A government spokesperson noted that action will follow the review of the latest INE analysis.
With the data in hand, Podemos has intensified its demands. Ione Belarra, the Minister for Social Rights and the 2030 Agenda, tweeted after learning the Mercadona results that the government should curb speculation and intervene in the market. She highlighted that many households are dealing with the economic crisis and struggling to keep food on the table.
Food prices rise 16.6% despite VAT relief in February
The executive’s spokesperson explained the February price surge as partly caused by weather problems that reduced the supply of fruits, legumes, and vegetables, and noted similarities with price movements in neighboring countries. The spokesperson emphasized the need to observe how existing measures unfold, aligning with the PSOE’s parliamentary stance. Patxi López echoed this view, arguing the government must explore the most effective tools and stressing that the administration has never stayed silent on the issue.
French basket
France recently announced a voluntary agreement with supermarkets to offer a range of goods at lower prices over a quarter-long period from March 15 to June 15. Chains such as Carrefour and Intermarché rolled out baskets of about 200 to 500 products at discounts. One of the largest retailers, Leclerc, viewed the measure as more of a communications effort than a true consumer help.
After the announcement, Nadia Kalvino, the First Vice President and Minister of Economy, joined by the Spanish agriculture minister, signaled support for similar moves in Spain if large distributors participate. AECOC, the employers’ group for large retailers, indicated that the idea had not yet reached them in Spain. For now, Mercadona — the market leader — has not adopted a comparable anti-inflation basket beyond its existing programs.
Offers on the table
In contrast to France, Spain previously approved a VAT cut and a reduction from 10 percent to 5 percent on essential goods, plus a drop from 4 percent to 0 percent on pasta and olive oil, along with a 200 euro check for vulnerable families (those earning under 27,000 euros annually). A day after these measures were approved by the Council of Ministers, the deputy prime minister and minister of labor cautioned that the tax cut alone might not reduce prices. February’s CPI data still showed prices rising—more than 16 percent—marking an historic peak since the series began in 1994, according to INE.
When the February figures were released, Podemos’ policy team argued that basket prices needed urgent caps or subsidies, and suggested the VAT relief had fallen short. Since mid-2023, they have proposed several options to the PSOE, including financing the 200 euro check through targeted taxes on large retailers, and a 14.4 percent discount on staples to restore pre-war price levels. The Socialists have said they are studying all options but have yet to commit to concrete measures.
Practical steps and transparency
As talks continue into September, major distributors have expressed support for a price ceiling on basic staples to deliver a cheaper basket to consumers. The Labor Ministry has argued that Article 13 of the Retail Trade Act empowers the government to set prices or margins on certain products when action is mandatory. Within the coalition, there is broad consensus that price controls could complement VAT relief and any future subsidies, though opinions differ on feasibility and impact. Some groups advocate rapid data publication to ensure maximum transparency in food price movements. Others call for stronger measures if current data do not show clear relief for households.
The leader of Más País urged the government to publish all data to guarantee full transparency in rising food prices. Support among allied parties remains strong for more interventions, even as the executive weighs different options. Only the PP has pressed consistently for extending the VAT reduction to meat and fish, arguing that these items are essential and should be included in any relief package.