Planas will monitor that distributors lower prices without applying new measures

Minister Luis Planas, at the meeting of the Food Observatory, this Monday at the Ministry. / CR

The minister points out that inflation “has peaked” and calls for “patience” so that the cost reduction is transferred to the shopping basket after the meeting with the sector

The meeting between the Minister of Agriculture, Luis Planas, and the food representatives (supermarkets, distributors, associations of farmers and ranchers, and consumers) ended with a request from the Government for the sector to transfer the cost reduction to prices which has been registered in the market for weeks now, without this new situation having been noticed in the shopping cart.

The Executive’s appeal to distribution, a sector on which most of the eyes were focused until now due to the rise in prices, is merely tacit -no document has been signed in this regard- and, above all, it has a voluntary character. It will be the businessmen who will have to avoid further price increases in the coming weeks, to the best of their ability, as Minister Planas wanted before addressing the meeting that ended without concrete measures.

The head of Agriculture has indicated in the press conference after that meeting of the Food Chain Observatory that his department will be “vigilant” so that businessmen fulfill this promise. In his opinion, “there are objective reasons” for food to “fall in price” and “change the trend” that has led them to record year-on-year inflation of more than 15% so far. In fact, the minister considers that this increase “has reached its ceiling” after the implementation of the VAT reduction on certain basic foods since January 1.

The response from the sector, as a whole, has been positive, but none of its representatives has felt completely committed to the possibility of lowering prices by necessity. Everything will depend on the evolution of the costs that, for now, seem to stabilize. Planas indicated in his speech after the meeting that companies will transfer to prices the drop in the costs of inputs that have been taking place in international markets for weeks. Although there are many nuances.

A “whole chain” problem

The general director of Asedas, Ignacio Magarzo, indicated that “there are reasons to think that the costs that are putting pressure on prices are going to drop in the following months.” “The Government’s forecast of this positive evolution is what we expect and will transfer,” he told the media after the meeting. He insisted that the food price problem is due to “costs, not margins”: “It’s not a supermarket problem,” he said. The head of the association of distributors and supermarkets indicated that although “producers are receiving more for their products, that does not mean that they are getting richer because costs have risen a lot.”

From Anged, another of the large distribution employers, they positively valued the meeting and recalled the “extraordinary work” carried out in the last year to “mitigate and not completely transfer to the final price of food the historical and disproportionate increase in the price of raw materials, energy and basic inputs for food production”.

At FIAB, those responsible for the food and beverage industry consider that it is a problem of “the entire chain, not of a specific link” and they asked the Government to extend the VAT reduction to other essential products and to postpone it. the entry into force of the plastic tax.

The descent of meat and fish is discarded

For this reason, although Minister Planas acknowledged that some actors in the chain had requested a reduction in VAT also for meat and fish at the meeting, for now the Government has ruled out this option. «In December we decided to reduce VAT on the most widely consumed foods and those that had risen in prices the most in the last quarter. We are going to continue examining alternatives », he indicated in his appearance.

Also ruled out for now is the United Podemos proposal to subsidize 14.4% of the shopping basket, according to the minister himself in an interview with this newspaper published this weekend. Vice President Nadia Calviño, for her part, indicated this Monday that this measure could have a “negative” impact even if it is done “with the best of wills.” Thus, she pointed out that they are “very complex” issues that can have a “very significant impact on public finances.”

The measures adopted so far are the reduction of VAT from the reduced rate of 4% to 0% on bread, flour, milk, cheese, eggs and fruit and vegetables, while pasta and oils went from 10% to 5%. In addition, the period to request the 200-euro check for vulnerable families has already opened, something that almost 900,000 households have already done, according to data from the Tax Agency.