Alex Trelinski
HIGH food inflation is stunting the growth of Spain’s food sector according to a report published on Tuesday by the country’s Federation of Food and Beverage Industries(Fiab).
As rising inflation has gripped Spain’s economy along with the rest of the world, the Fiab study said that the average expenditure per person in each household fell by 1.8% last year to stand at €1,427 per annum- €26 less than in 2021.
Increased prices coupled with measures to curb inflation like higher interest rates have led households to change their spending patterns.
“Food and beverage consumption has been directly impacted by the increase in the Consumer Price Index in 2022,” Fiab said in their report.
The Spanish food sector took an understandable hit last year despite it continuing to grow, but at a much slower pace than before.
The average growth rate stood at 4.5% between 2015 and 2019, while production only grew by 1.5% last year- netting just under €145 billion.
No figures were produced for 2020 and 2021 due to the Covid-19 pandemic.
The 2022 slowdown came from production costs accelerating since the end of 2021, with a rise of 18.6%, caused by increases in energy prices, transport, and raw materials.
“There has been a loss of dynamism in the real rhythms of productive activity in the sector and a reduction in margins so as not to generate greater imbalances between supply and demand,” the Fiab report commented.
The federation’s general-director, Mauricio Garcia de Quevedo, said: “During 2022 we suffered a global crisis that has generated uncertainty, instability and the serious inflationary situation that we all suffer.”
“The results presented by many companies in the sector show how they have reduced their margins so as not to pass on to the consumer the increases they have suffered,” he added.
Garcia de Quevedo called for help to protect a ‘strategic sector in Spain and Europe’ from the economic vulnerability which it is currently going through due to the current situation.
READ MORE:
- Bank of Spain forecasts double-digit food inflation rate to continue for rest of 2023
- Food inflation in Spain reaches record levels despite January tax cuts
