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Yolanda Díaz’s price cap on food finds opposition in the sector and division in government

The recent proposal by Vice President and Minister of Labor Yolanda Díaz to limit the price of a “balanced and healthy basket” of food, which she told elDiario in an interview published on Monday, has caused doubts and opposition in the food sector. Division and division of opinion in the government.

Luis Planas’ Ministry of Agriculture was previously (and remains) positioned against him, as were other PSOE portfolios. On the other side of the coalition, the Ministry of Consumer Affairs of Alberto Garzon is included in the working group to negotiate this new limit, which aims to alleviate the losses of families and producers as a result of the current inflationary crisis caused by the increase and exacerbation of energy prices. Russia’s invasion of Ukraine.

Employers of supermarkets and other food distribution companies deny that they had any prior knowledge of the announcement. And although they admit that the increase in oil, bread, milk or eggs is a serious problem, they believe that a measure such as reducing the VAT (value added tax) on these products would be more appropriate.

A day before the publication of the interview with Yolanda Díaz (Sunday), Luis Planas assured Europa Press in a statement that the price intervention is an “exceptional measure” that can only be taken in accordance with European regulations in this case. This is not the case with regulated markets and agro-food markets. From the Ministry of Agriculture, this Monday, they defend this position, which elDiario confirms. Other government sources claim they were unaware of the proposal.

In an interview on the Cuatro channel, government spokesperson and Minister of Territorial Policy Isabel Rodríguez ruled out the proposal of a second vice president, noting that the policy lines of the executive branch are going in a different direction. “We are in the free market, but the government’s measures are going in a different direction. I understand that the second vice president is deepening this approach, but today the strength of the government is different: to strengthen the purchasing power and help the productive sectors to take responsibility for the increase in costs, “said Rodríguez.

Meanwhile, Yolanda Díaz reiterated this Monday that “food is a huge problem for our country, citizens and producers” and that she is not looking for a law, but an “agreement” that will not violate competition with distributors and consumers “to define a basket of basic products, about 20 or 30 , in which, as we have done with gas and other materials, we reduce prices”.

Food inflation, he emphasized, “is a problem for the consumer, because he loses purchasing power and finds it difficult to eat healthy. And for the producer, because he sells his oranges for 15 cents and we buy for 1.40 euros, or it happens with potatoes…”, transport and energy costs skyrocket.

“There is already, for example, a maximum price for a Bhutanese balloon, because this is a special moment, we are at war,” added the second vice president.

Food experiences a large variation between the price at which producers sell their products to distribution companies and what consumers have to pay when these products are sold on supermarket shelves. The agricultural association COAG monitors these price changes on a monthly basis. According to their data for the month of June, the difference between the price at which the farmer sells and the price at which the supermarket sells was 575% for potatoes, 887% for oranges or 749% for garlic and other products (see graph).

On the other hand, the sources of the Ministry of Consumer Affairs shared that the proposal is “fundamental” and that it was previously discussed with Yolanda Diaz, also that Alberto Garzon will have an active role in the “agreement” of the basic and healthy basket, but it is not a matter of unilaterally specifying the products from the government, but an agreement with the companies “.

“A progressive government needs to protect the purchasing power of working families, and the crisis cannot be paid for as often as big companies in this country, especially energy companies, continue to make extraordinary multimillion-dollar profits.” They explain in consumption.

“It will be of great help to families if an agreement is reached between the large distribution companies and the primary sector, which will result in a consumer basket of basic products with limited prices. Undoubtedly, this event will not exhaust the range. Other possible measures to achieve the goal of stemming the loss of purchasing power,” they add.

Much more reserved, the PSOE’s national representative, Pilar Alegria, refused to make an estimate, insisting that the PSOE was “fully aware” of the cost increases that producers would have to face, given the increase in fertiliser, energy or cost. to store. He noted that “from the first moment” “measures to contain the high growth of costs” were approved and pointed to a 20 cent discount per liter on fuel or a reduction to 5% of the VAT applied to electricity. It has now been extended to gas as well as other electricity related charges. Also included in Ukraine’s war economic response plans is a livestock aid package – €169 million for dairy farmers and another €193 million for beef cattle – and the recent approval of reform of the food chain law.

For their part, in Podemos they recall that they have already proposed a special tax on the extraordinary profits of large food companies, a measure they consider more effective than the price cap agreement that Yolanda Díaz defends. “From Podemos, we have already proposed the creation of an extraordinary tax on large food and distribution companies to help families with income in the shopping cart,” recalls Pablo Fernández, representative of the purple formation. Fernández said it was “good” that the government was trying to reach agreements, although he stressed that what he needed to do was “make a decision”. Jose Enrique Monros reports.

At the press conference held after the meeting of the Coordination Council, the Speaker assessed the proposal put forward by the Vice-President as “reasonable”, however he refrained from directly supporting it after admitting that he considered it unrealistic. “It will be complex to reach an agreement with the big companies so that they reduce their benefits. It is the government that should determine the priorities, and our priority from Podemos is to support families, and we believe that the most appropriate solution is this extraordinary tax,” he said.

from the employer angry (National Association of Large Distribution Companies), which includes Alcampo, Carrefour or El Corte Inglés, reduces the proposal to the personal assessment of the vice president. “We don’t know to what extent this opinion is shared by the rest of the government, and neither does the CNMC.” [Comisión Nacional del Mercado y la Competencia]”, they suspected this Monday. St Aces (Supermarkets Association), which aligns with the pre-Eroska groups, prefers not to comment on the vice-president’s proposal.

on its side, inside handles (Spanish Association of Distributors, Supermarkets and Supermarkets), whose members are DIA, Save More, Condis, Covirán, Lidl or Mercadona, admit that they have been warning about their concerns about prices since January and defend their proposal to reduce VAT on food. in which there is a margin of 21% to 10% or 10% to 4%, “because inflation causes more to be collected”, by increasing the tax as the price rises.

“Inflation is caused by known causes,” Asedas laments, listing the war’s impact on “imported raw materials (cereals, fertilizers…), fuel and energy in general, although they maintain that food. The CPI (Consumer Price Index) “indicates containment efforts [de trasladar este incremento de los costes a los precios finales de los productos] What did the sector do?

From April to July, according to the latest CPI data, which is detailed, food price increases outstripped headline inflation every month. In April, the food index jumped to 10.1% year-on-year, a rate that has not stopped rising since then to 13.5% in July, always compared to the same rate last year and when average inflation remained at 10.8%.

This acceleration is much more moderate than the energy IPC, fully fired. However, it is worth noting that the largest monthly jump was recorded in April, by 3.4 points, and that it has fallen since then, rising only 0.3% in July.

“Transport strike [a finales de febrero] There was a serious impact,” recalls Asedas, who claims that “as Planas admits, the whole sector is behaving responsibly” and believes that “it makes no sense to interfere with the price.”

“We are ready to sit down and talk, but we have had no news on this proposal, and the Ministry of Agriculture recognizes that the supply chain works and the huge competition guarantees that prices are effective,” continued the employers’ association. , which defends that it is an “extremely responsible industry that has shown itself in the pandemic”.

Source: El Diario





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