Farmers and large grocery chains are resisting a proposed price ceiling on essential foods, championed by Yolanda Díaz, the Second Vice President and Minister of Labor. In the region, José Miguel Marín contends that retailers will persist in keeping profit margins intact, even if it means paying suppliers less. “There would be pressure we cannot endure, and eventually producers will stop supplying products with a ceiling in place,” Marín warned. He highlighted that European rules prevent price fixing and noted a lack of consensus within the government. When prices rise, consumers tend to shop elsewhere, leaving chains with limited choices but to uphold higher costs.
Yolanda Díaz promotes broad distribution and a negotiated agreement with consumers to cap the cost of basic groceries to curb the rising cost of the shopping cart. Yet the Minister of Agriculture, Louis Planes, argued that such a proposal is not viable in a free market economy because existing legislation does not permit it.
Marín insists that everyone has a stake in the process and that the links in the food chain must cover their costs while earning a fair profit. Still, he questions how certain items, like watermelons, can cost farmers around a quarter in normal years but rise to about two euros in a supermarket some 30 kilometers away, noting that there is no explanation offered.
He also cites the example of a peach box that sells for just over 80 cents at the farm but costs more than three euros in major supermarkets.
The COAG president argues that the only viable path to prevent consumers from paying exorbitant prices for goods the farmer effectively prices at cost is the Food Chain Act, which prohibits selling at a loss.
Marín warns that capping food prices could push chains to preserve profit margins at the expense of suppliers. “It would be a pressure we cannot bear,” he stated. If farmers’ incomes shrink further due to poor profitability, he feared they would stop farming, urging a rethink of potential remedies.
Javier Ruano, managing director of the Association of Regional Supermarkets (Asumur), provided a perspective on his behalf: distribution chains tend to delay cost transfers to products. “There is substantial competition, and if prices rise, consumers will buy elsewhere.” He proposed reducing food taxes and delaying the plastic tax, which is set to take effect next year.
Ruano noted that in Spain the five largest supermarket chains control about 50% of the market, with the remainder spread across many smaller players. He asserted that intense competition helps curb prices and noted that in Scandinavian countries, concentration in the distribution sector can reach around 80%. He stressed that Spain is characterized by significant intercompany competition and a dynamic market landscape.
He attributed price increases at the shelf to intermediaries and to higher energy costs associated with cold storage and logistics, which account for approximately 40% of the cost. He added that raw materials, packaging, and other inputs are also becoming more expensive.
Small traders are not in favor of price limits either. José García, president of the Santa Florentina Market Merchants Association, called the measure “extremely complex” to implement in the food market, given that prices for vegetables, fruit, meat, and fish vary daily in both directions. He noted that volatility depends on numerous seasonal factors such as quantity and quality of produce, meaning a price cap could impose burdens on some traders.