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As many as seven of the major supermarket chains in Spain have come under the scrutiny of Facua-Consumers in Action for failing to reduce the VAT on basic food items.

 

Last week, the Spanish government implemented a series of crisis measures to ease the impact of the current financial crisis. Among these was the removal of VAT entirely on staple food items like bread, milk, fruit and veg and the reduction to 5% of the tax on pasta and olive oil.

 

Between December 30 and January 3, Facua reviewed the prices of 676 items in Alcampo, Aldi, Carrefour, Dia, Eroski, Lidl, Hipercor and Mercadona and discovered that the VAT reduction hadn’t been applied to 52 products.

 

Across the supermarkets, the price of 34 food items was identical to the cost before the measure was announced, the cost of a further 11 products didn’t reflect the entire tax cut and seven products were even more expensive than before.

 

Of all the major chains examined, only Mercadona had implemented the price reduction correctly. Dia and Carrefour were the worst offenders, failing to apply the tax cuts on 17% and 10% of their basic products, respectively.

 

Technically, Mercadona was found to be at fault initially but Facua removed it from the list after deciding that its ‘World Champion Bread’ "cannot be included in the name 'common bread' having seeds among its ingredients."

 

Facua will continue to monitor the implementation of the plan in the coming months and punish the supermarkets that don’t comply. Essentially, stores aren’t allowed to raise the price of food affected by the VAT drop until at least the end of April, and the tax reduction will be increased for another two months after that if the underlying VAT for the month of March is not below below 5.5%.

 

It’s been a week of Spanish supermarkets behaving badly: a few days ago, Lidl, Aldi and Dia were fined for advertising their ‘Roscones de Reyes’ cake as containing fresh cream when in fact it contained a substitute.

 

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