The attempt by the second vice president, Yolanda Díaz, for an agreement to limit food prices due to inflation, announced in elDiario.es, adds a relevant point in her favor. The news generated a lot of attention, but also many misgivings. Harsh criticism from the CEOE, opposition from the employers’ associations in the sector, a lowering of expectations from members of the Executive of the socialist wing and even some buts from Podemos. However, the movement of one of the main supermarket companies has altered the picture. Carrefour has been ahead of the rest and has launched a reduced basket with basic products, as Diaz requested, which puts pressure on its competitors in a very competitive market.
Yolanda Díaz’s price limit on food finds opposition in the sector and division in the Government
Carrefour’s maneuver, which has offered a basket of 30 basic products at 30 euros, has resulted in a meeting this Thursday between the CEO of Carrefour Spain, Alexandre de Palmas, with the second vice president and the Minister of Consumption, Alberto Garzón, to company request.
After her, Díaz and Garzón have appeared before the media to give more details of the recommendations of the second vice-presidency for this shopping basket “at affordable prices”, which will begin work this Monday with a meeting with the main employers of the sector distribution and numerous consumer organizations.
Until Christmas and a changing basket
Yolanda Díaz has explained that, to the initiative announced by Carrefour, the second vice president and the Minister of Consumption have transferred five major recommendations. The first is that the basket with reduced prices be deployed now, to facilitate the start of the school year for many families, and that it be extended until after Christmas.
The vice president highlighted in second place the need for the basket to offer “fresh products and proteins”. Díaz has put as examples that fish, meat, eggs, fruits and vegetables are included, for which Minister Alberto Garzón has highlighted that they are “quality products” to the extent of the possibilities and margins of the companies.
The third recommendation is that the basket is changing, “rotating every week”, with the intention that families who come to it have a varied and balanced diet. Díaz and Garzón have insisted that the Government is not asking companies for a catalog of specific products, but that they try to offer healthy and varied food to consumers.
Fourthly, Yolanda Díaz has asked the companies to launch a special basket for households with a member with celiac disease, with specific foods for these people with prices that are sometimes unaffordable for some families, the vice president pointed out.
Finally, Díaz has demanded that the distribution companies that offer this basket of reduced prices do not pass on the cut to the producers. “We ask the large distributors for the effort, which are the ones with business margins for it”, the second vice president has reiterated on several occasions. “This Government will guarantee that the Food Chain Law is complied with,” she insisted.
Pressure for the rest of the sector
Carrefour’s early maneuver by launching its offer before the meeting with the employers next Monday has notably altered the scenario. The position of the main business distribution organizations was in opposition to the proposal and they were inclined, above all, for the Government to intervene through cuts in VAT on food and basic products.
Now, however, the passage of Carrefour generates pressure on the rest of the companies. In the face of inflation, the supermarket employers already warned: the sector is marked by very strong competition. There are about six or seven large companies that dominate the sector, with 50% of the market. It is headed by Mercadona, with 25% of customers, followed by Carrefour, with 9.6%, and Lidl in third place, with 6.2%, according to the latest data from the consulting firm Kantar.
Price increases or decreases in a given area have rapid repercussions on customers, who can easily switch from making purchases at one or another distributor encouraged by movements in prices and offers. Thus, Carrefour’s strategy alters the panorama in the market and puts pressure on the rest with downward prices.
Yolanda Díaz has insisted that the Government will not comment or position itself on commercial offers from specific companies, but has called for a major agreement between the main companies in the sector, about which she has been optimistic. “This is the house of dialogue”, she has reminded her about the social dialogue agreements with employers and unions. Minister Alberto Garzón has gone further and has stated that Carrefour’s initiative “reflects and expresses that it is possible to do it, it is possible to have a basket of products with frozen prices for after Christmas”, he has maintained, which he hopes will be transferred in which more companies offer a basket at limited prices.
Regarding Podemos’s warning that the measure could harm small businesses, which shared on Twitter Pablo Echenique, the second vice president has warned that “an effort” is being asked of large companies because “they are the ones that can do it”, contrary to what happens with small businesses. In any case, Díaz has encouraged people to go to local businesses.
Given the comment by the Minister of Defense, Margarita Robles, who denied Yolanda Díaz’s competence in this matter, the second vice president has warned that the economic measures to alleviate the effects of inflation “are the responsibility of the entire Government, with the president at the helm.”