Monday, July 1, 2024, 8:29 p.m.
The elimination of VAT on olive oil is already being noticed in supermarkets in the Region of Murcia, although the drop in price is still far from alleviating the extra effort that it means for households to purchase this product that is commonly consumed by families, which It has tripled its price in the last three years and adds an increase of close to 40% in the last six months alone.
A comparison of olive oil prices carried out by LA VERDAD, taking as a reference the records published by Facua for the month of June for five large supermarket chains, and comparing them with those offered in the online stores of these same stores, shows an average fall in extra virgin olive oil of more than 50 cents per litre, which is within expectations.
The fear that the VAT reduction could end up benefiting the big chains instead of the consumers as the Government intends, has kept consumer organisations in the Region on alert, which were closely following the evolution of prices on Monday, although the measure seems insufficient to mitigate the rise in the price of the shopping basket.
Little savings
“What we have to work on is containing prices, not removing a tax that represents a very small saving, and it seems that no one knows how to find the key,” says the president of Thader Consumo, Juana Pérez. “A drop of 50 cents in a liter in this product, even though it is basic for families, is insignificant in monthly spending,” she adds.
For his part, the president of Consumur, Roberto Barceló, warns that his organization will take note from Tuesday of a sample of prices in different brands and establishments that will be updated “for several months” to check the correct transfer of the reduction to the final consumer, which is now mandatory. In this regard, he recalls that “although sellers have purchased the oil from the producer by paying the corresponding VAT, they can no longer apply it to the final consumer” after the entry into force of the decree law.
13 euros on average
Taking as a reference the prices of some of the main brands of extra virgin olive oil registered by Facua in Mercadona, Carrefour, Hipercor, Dia and Eroski, the average reduction experienced on July 1 compared to the prices recorded in June was 4.1%, with a total of 56 cents per liter, going from 13.56 to 13.02 euros, as reflected in the various online sales portals.
Barceló complains that the vigilance of consumer associations is necessary due to the “negligence of duties” of the administrations. “They are failing to carry out their duty, and despite the complaints that are being forwarded to the central and regional administration, they are not taking action,” he complains, while recalling that the Community has “only 7 inspectors for the entire Region.”
In some cases, the price similarities of olive oil and its variations have close similarities. In white label extra virgin oils, for example, the initial and final prices after the withdrawal of VAT were practically identical in Mercadona, Carrefour and Hipercor, going from 9.90, 9.89 and 9.90 euros, respectively, to 9.19, 9.18 and 9.19 euros, which represents a drop of about 7.2%.
“There is a lack of transparency”
Barceló recalls that “since January 2023, when many products went from having 0% VAT and oil went from 10% to 5%, there has been a price increase that was prohibited in the decree law, which stated that the product could not be made more expensive than the production cost would have increased.” The problem, he points out, is the difficulty in estimating these production costs. “There is no transparency in this that allows us to know if there are illegal margins, nor has anything been done by the Administration to guarantee it.”
The central government’s measure to reduce VAT on olive oil to 0%, which has been welcomed by employers, will end on 31 September, at which point it will be taxed at 2% until the end of the year. What happens next remains to be seen, although the vice-president of the government and Minister of Finance, María Jesús Montero, already announced during a press conference held after the Council of Ministers that when these exceptional measures end, olive oil will be included in the basket of basic foodstuffs, which guarantees the application of a super-reduced VAT that cannot exceed 4%.
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