Spain’s Andalusia to scrap wealth tax in bid to attract high earners

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Spain’s Labour and Social Economy Minister is calling for the country’s large supermarket chains to each prepare a fixed-price shopping basket of food and other daily goods that could allow consumers to circumvent the 13.8 percent inflation (August figures) that’s forcing Spaniards to tighten their belts and change their eating habits.

“Our proposal is that large distributors reach an agreement and that through business margins they ensure an affordable shopping basket for our country,” Yolanda Díaz said last Thursday after meeting with the executive director of Carrefour, Alexandre de Palmas.

The French supermarket giant had already come up with a list of 30 basic products for €30, although this has come under scrutiny for including items such as a kilo of sea salt and a litre of sunflower oil which don’t need replacing every week, but no fresh or staple products such as meat, fish, milk or eggs.

This doesn’t fit Díaz’s suggestion of “an affordable shopping basket with quality products” stacked full of proteins and fresh produce, but for many business owners belonging to Spain’s food sector the concept in itself is flawed.

According to a joint statement by Spanish supermarket associations ANGED, ACES and ASEDA, large, medium and small establishments all reject the Spanish government’s proposal as they consider it “unfeasible and counterproductive”, one that could cause “serious competitive risks” by benefiting large supermarkets to the detriment of smaller ones, as well as negatively affecting consumers in smaller towns and villages that don’t have hypermarkets.

“(Spain’s) food distribution industry cannot accept the agreement of a shopping basket at fixed prices and asks the Spanish government to help to control the food CPI”, the associations stressed, adding that whilst the sector has seen its production, packaging and logistical costs rise by 12.8 percent, they’ve fought to maintain the price rise for consumers no higher than 6.7 percent on average.

Instead they propose that the Spanish government introduce a temporary reduction in VAT on food and an energy price fix for the entire food supply chain.

But Díaz, together with Spanish Consumer Affairs Minister Alberto Garzón, continue to insist that their government will draft a list of food, cleaning and other key products that will serve as a guide for supermarkets and hypermarkets that wish to implement the affordable shopping basket if they see fit.

In 2011, the French government managed to convince two of its leading supermarkets, Carrefour and Cora, to put together a shopping basket of essential goods in the face of rising prices caused by the Arab Spring. In this particular case, the list did include fresh produce, from chicken, cheese and fish to kiwis, oranges and apples.

READ ALSO: Nine ways to save money on grocery shopping in Spain

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