Fair Pricing and Industry Transparency: Efforts to Address Consumer Concerns in the Agri-Food Sector Amid Economic Uncertainty

Government agencies and industry stakeholders are working to ensure fair pricing for consumers and support the food industry during economic uncertainty. Supermarket chains have been asked by the government to provide information on how they are passing on the VAT reduction on food to customers. The anti-crisis decree prohibits supermarkets from using the tax discount to increase their profit margins, but some have requested extensions to the deadline for submitting accounts proving compliance.

The Ministry of Consumer Affairs had initially given them a deadline, but all required information has been submitted and is currently being reviewed. The National Commission of Markets and Competition (CNMC) is also monitoring supermarkets to ensure they are passing on the tax discount to consumers. In addition, an observatory by the Bank of Spain indicates that corporate margins in the agri-food chain increased slightly in the second half of 2023. Margins in agriculture increased while those in the food trade declined since 2021.

Food industry stakeholders are now preparing to ask for an extension of the VAT reduction on basic products beyond June 30, until the end of the year. They may also propose expanding the list of affected products to include essential items like meat or fish. Meanwhile, there is ongoing monitoring of a bill including a VAT reduction on olive oil to 0%. All these actions are aimed at ensuring fair pricing for consumers and supporting businesses during economic uncertainty.

Government agencies and industry stakeholders must work together to address concerns about rising prices, unfair business practices, and consumer protection issues related to food products. This includes implementing regulations that protect consumers from price gouging, ensuring fair competition among retailers, and promoting transparency in labeling and pricing practices.

It is important that supermarkets comply with anti-crisis decree regulations regarding VAT reductions on food products. If any retailer is found guilty of violating these rules, appropriate action must be taken against them.

Overall, efforts must be made by all stakeholders involved in the agri-food chain to maintain fairness and transparency in pricing practices while addressing concerns about rising prices and consumer protection issues related to food products.