Consumer Affairs investigates whether supermarkets are getting VAT cuts on food prices right

The Ministry of Social Rights, Consumption and Agenda 2030 requested information from the main national retail distribution operators to investigate whether they are correctly passing on VAT reductions on certain foods such as olive oil or fruit and vegetables to the final consumer.

This action was carried out through the General Unit for Inspection and Sanction Procedures, which belongs to the General Directorate of Consumer Affairs and is integrated into the department headed by Pablo Bustinduy.

The reduction in VAT on certain foods, such as olive oil or fruit and vegetables, was a government measure under the social shield to counter rising prices caused by Russia’s invasion of Ukraine.

Consumption explained that the beginning of this investigation originates from the receipt by this department of various complaints from consumers and consumer associations, where information was transmitted about a possible increase in profit margins in retail distribution last year, mainly on foods such as fruits and vegetables or olive oil.

This study is also part of Consumo’s food pricing transparency and clarity strategy to protect consumers and measure the positive impact of government measures and public policies.

In this sense, the temporary application of the reduced VAT tax rate to certain food supplies, imports and community purchases, which lasted until June of this year, “expressly prohibits the full or partial increase of this reduction.” The profit margin of the business, because its goal is to precisely reduce the price of food purchased by the final consumers.

For this purpose, within the framework of this first stage of the investigation, supermarket and hypermarket chains were asked to provide information on the prices at which they sold products subject to the temporary reduction of the VAT rate during the last months and on their evolution. Commercial margin or cost structure in relation to said products.

This practice, if it occurs, may be considered a violation of the rules governing prices and margins, which is a violation of Article 47.1 of the Consolidated Text of the General Law on Consumer and Consumer Protection and Other Additional Laws. Royal Legislative Decree 1/2007 of November 16, which can result in sanctions of up to 100,000 euros, or four to six times the illegal benefit, for the most severe cases.

Source: El Diario





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