Spain’s retailers dodge government proposal to freeze basic commodity prices According to Reuters

© Reuters. FILE PHOTO: People push carts in a Carrefour supermarket in Cabrera de Mar, near Barcelona, ​​Spain May 19, 2017. REUTERS / Albert Gea

MADRID (Reuters) – Spain’s main supermarket chains on Monday rejected a left-wing coalition government’s proposal to temporarily freeze prices of a basic staple to ease the pain of high inflation, calling on the government to reduce taxes instead.

The proposal, which seeks to find an agreement with retailers to offer fresh products including fish, meat and eggs at fixed prices until January, has also been met with skepticism from other business groups and opposition politicians, who see the move as price regulation.

Labor Secretary Yolanda Diaz and Consumer Minister Alberto Garzon, who support the idea, met with the industry on Monday to explain the proposal, which they consider “legal and based on competitive principles”.

But retailers said they have had several price cuts and are making “an extraordinary effort” to avoid passing on rising costs, such as energy, to consumers as much as possible.

The three business associations in the meeting represented the majority of the sector, with companies such as Carrefour (EPA:), Alcampo, Auchan brand in Spain, El Corte Inglés or Mercadona, the leading supermarket chain in Spain with 25% market share.

Javier Millan-Astray, head of the National Association of Large Distribution Companies (ANGED), told reporters: “If you try to put a fixed price in the cart, you’re trying to distort it,” he said. relationships between retailers and suppliers. meeting.

“It’s inevitable that there will be an increase, but you can’t kill the messenger,” he added.

With annual inflation at 10.3% in August, Spaniards are increasingly concerned about the cost of living.

According to a recent poll by manufacturers and distributors association AECAC, 65% of consumers place price above other factors when shopping and 63% shop for discounts.

Instead, the industry asked the government to reduce the value-added tax on some products.

Ignacio Garcia-Magarzo, head of supermarket association ASEDAS, said: “We have asked Minister Garzon to tell us today which food products should be taxed at 21%, and which should be taxed in the country. 10% or 4%.”

Last week, French retailer Carrefour said it would offer Spanish consumers a basket of 30 staples for 30 euros, but that was before the government’s proposal and did not include the products. fresh that the authorities want to list.

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