The latest FACUA report concludes that with the elimination of VAT, instead of lowering prices, the shopping basket is increasing and supermarket chains are enriched. On 30 December last, the Spanish Government withdrew VAT on basic foods with the aim of reducing the increase in the cost of the shopping cart in the first half of 2023. Currently, the tax was 4% for basic foods such as eggs, vegetables, fruits, legumes, bread, cheeses and dairy products, VAT has been reduced from 10% to 5% for oil and pasta.

The FACUA Association has analysed prices before and after each month of VAT reduction. Here are some examples of increased growth.

Clearly, the biggest price increases have occurred in the fruit and vegetable sector:

-Mercadona raises the two-pound onion basket from 2.30 to 3.99;

-In Eroski, the four-onion bag has risen from 1.49 to 2.47 euros from February to March.

-In Dia, the three-kilogram potato bag goes from EUR 2.88 in January to EUR 4.22 in February, which is maintained in March.

-In Hipercor, for example, the white label for round rice has increased from 1.82 to 2.79 euros since VAT was removed.

- and finally, the kilo of pomegranate in Carrefour: EUR 1.91 per kilo when VAT was abolished; EUR 3.99 per kilo in February; and EUR 4.99 per kilo in March.

FACUA publishes a detailed study table.

"Illegal"

The Decree abolishing VAT on basic foods, in particular Article 72 of Decree 20/2022 of 27 December, states that "the reduction or elimination of taxes will only benefit the consumer and in no case business agents, producers, distributors or sellers".

The consumer association FACUA has once again approached the Spanish Competition and Market Commission to denounce the "illegality" of the activity of the large supermarket chains.