July 29, 2021

“Consumption does not support VAT increases at this time”




The role of supermarkets and the entire food chain during confinement was key so that our country did not suffer a supply problem. During the three months of the state of alarm, the activity of the food stores was practically considered essential. A recognition that it did not have before the health crisis and that now asks that it continue to be done to help ensure that there is a supply in the future, especially now that there is almost a second wave of cases in Spain. This is what he explains to ABC Ignacio García Magarzo, CEO of Asedas, employers of distribution companies such as Mercadona and Dia.

Stocking up food and hygiene products during the state of alarm caused supermarket chains to experience a rise in sales. However, Magarzo reveals that “the sector has not made its August” because during that time there was “a decrease in margins because the best-selling products were not the highest priced». In addition, he explains that the pandemic also “has caused an increase in costs to take security measures, protection and organization of stores.”

Now, with the new normality, this turnover has stabilized and has returned to the levels of previous years, although Magarzo is concerned that there will be a decrease in consumption due to the economic crisis. So he defends that there are no tax increases because he understands that it would harm consumption levels. “VAT must not be raised. At this time, consumption, which was already vulnerable because it had not recovered from the previous crisis, does not admit VAT increases; It would be very harmful, “he says. He also argues that the EU launched the “From farm to fork” initiative two months ago, “where they are thinking of reducing VAT on fresh products, especially vegetables.”

But it does not only reduce VAT to your fear of possible tax increases. Asedas also opposes special taxes, such as the plastic tax, the draft of which was released a month ago. According to the employer’s director general, “it may sound like an environmental measure, but these are the containers that use the bulk of mass consumption. If they don’t have a real alternative, it ends up becoming an indirect consumption tax. ”

Another of the sector’s claims to the Government is that it relax the regulatory pressure. According to Magarzo, this increased by 572% during the pandemic due to health regulations, ordering of flows, schedules, establishing shifts, among others. “Our sector has been highly regulated as a result of the pandemic, but it was already before,” he explains.

As for another issue that the Government has in mind, such as that of the repeal of the labor reform, the CEO of Asedas considers that “it is important that the current structure of agreements be maintained”, where the company structure currently prevails over that of the sector. According to Magarzo, “the diversity of companies and regions in our sector requires that each company can voluntarily decide to be in the field they want and that there are no conditions that are imposed”.

Agreement on schedules

In the aftermath of the health crisis, the commerce brought to the table the debate of being able to open during the holidays to recover part of the income lost during the confinement. A proposal that Asedas wants to point out that it should not affect the food trade, because “We have different needs”. Magarzo comments that in the case of supermarkets “demand does not increase nor sales increase due to the fact that there are more opening days.” So he advocates reaching a great pact between all members of trade, including workers through unions.

The other issue that the sector is debating is the strengthening of the agri-food chain law with the Government and agrarian organizations. In February, farmers protested and pointed to large distributors as the culprits for the low prices they had to sell at source. Magarzo defends the efficiency of the current food chain and rejects that the price increases in the different links affect the final price, because “we would lose competitiveness”. He explains that “we don’t feel guilty about the farmers’ problems, we can be part of the solution.” Thus, it proposes that larger cooperatives be created that can structure and order supply and that more stability be given to relations between companies and suppliers through contracts.

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