Supermarkets in Spain to be probed for ‘not lowering prices for customers despite receiving tax cuts’

SPAIN’S supermarkets are to be investigated over whether they have been ripping off customers over VAT cuts on essential foods and basic goods.

The reduction was introduced by the government at the start of 2023 as part of their package to fight rising inflation.

Consumer groups like Facua have sent in regular reports and complaints to the Ministry of Consumer Affairs accusing some retailers of profiteering from the measure.

The Ministry has responded by announcing an inquiry and has formally requested information from the country’s main retail distributors.

The crux of the investigation will be food price rises- especially on fresh produce like fruit and vegetables as well as olive oil, which has seen a price hike of over 60% in the last year.

The Consumer Affairs Ministry says it as acting on ‘various complaints from consumer and shoppers associations in which details were submitted about profit margin rises within retail distribution in the last year’.

The department has asked Spain’s biggest supermarket and hypermarket chains to provide details of prices that products have been sold in recent months, taking into account the VAT cut.

They also want information about profit margins and cost structures of food chains to determine whether or not shoppers have had the fold benefit of the tax reduction.

If any retailer has broken the law, they could be fined up to €100,000 for each transgression.

The Ministry of Consumer Affairs has reiterated that that the temporary VAT cut on designated products ‘expressly prohibits this reduction from being used in whole or in part to increases profits, since its purpose is to reduce prices paid by consumers’.

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