At the start of the month, official statistics showed food inflation in Portugal running higher than in previous months. February figures revealed a 16.7% rise in food prices, nudging above January’s 15.4% and surpassing the 15.7% peak recorded in December. To ease the burden on households, authorities temporarily removed VAT on staple items such as bread, fruit, legumes, and vegetables, and reduced VAT on other grocery products. In some cases, the VAT rate was slashed from 10% to 5% on items like pasta and oils, effective from January 1. Later, Portugal took a page from a neighboring country’s playbook, extending 0% VAT to a broader basket of 44 foods. This move arrived in a tougher context, with food inflation above 20% overall, and about 20.1% for certain items. The 44 foods include the country’s most-consumed fish species such as cod, sardines, tuna, mackerel, sea bream, horse mackerel, and canned tuna, along with various meat and fish products, all benefiting from zero VAT.
The socialist administration secured an agreement with production and distribution sectors to implement zero VAT on the 44-item basket. The arrangement, described as a plan to stabilize and lower prices for two essential foods, also outlined support measures for manufacturers grappling with higher costs, negotiated with the national employers’ federation CAP and the distribution association APED. Prime Minister António Costa indicated that the policy would affect public finances by around 600 million euros. [Source: Government statements and industry associations]
Calviño confirms that inflation will drop in March and prices will stabilize in summer
In a broader regional context, officials emphasized that joint efforts would be necessary to safeguard consumers who purchase everyday goods. They noted the uncertain duration of the current conflict and the risk of ongoing increases in production costs if the situation persists. An official commented that the government understood producers’ need for compensation and that discussions would continue to refine the support. [Source: Economic briefings and press conferences]
The president of the Portuguese Farmers Confederation remarked that the government had acknowledged the producers’ needs. The head of the Association of Distribution Companies stated that retailers were prepared to assume a responsible role in stabilizing prices for households. The list of 44 foods includes beloved fish staples such as cod and sardines, along with canned tuna, sea bream, salmon, and other pelagic species like horse mackerel and mackerel.
The move was welcomed across the border in Spain, where industry groups have long urged VAT reductions on certain foods. Spanish employers have pressed for VAT cuts from 10% to at least 4%, a demand intensified by the pandemic and renewed in recent months as Spain prepared to lower taxes on selected foods.
Nutritionists noted that the Portugal basket was designed with healthy eating in mind and reflected the foods most in demand by residents, aligning with why Spanish employers supported the approach. If Spain adopted a similar list, it could extend access to nutritious fish products at lower prices.
Industry voices, however, indicated that the debate is far from settled. They stressed that while the Portuguese example demonstrates a viable path, the broader agenda for reform remains active. Some employers cited a clear roadmap and argued that Portugal’s experience proves the feasibility and fairness of such measures.
Generalitat Valenciana allocated a €90 consumer voucher in April. In mid-April, the Valencian government announced a shopping cart voucher—a prepaid card with a €90 balance, valid for four months and usable for purchasing food through autonomous community programs. The initiative targets residents with household incomes not exceeding €21,000 and is expected to benefit more than half a million Valencian families. The scheme also complements the regional minimum living income aligned with the Valencian inclusion income and the national aid package of €200. President Ximo Puig described the measure as an ethical obligation achieved through ongoing dialogue with employers and unions, calling it a meaningful step forward.