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Would France's “anti-inflation” agreement plan be applicable in Spain?

The Spanish Minister of Agriculture, Fisheries, and Food, Luis Planas, the third vice president and minister of Economic Affairs and Digital Transformation, Nadia Calviño, and the Minister of Labor, Yolanda Diaz, all praised the agreement reached by the French Government and the distribution sector to fight inflation in the country. According to Diaz, achieving this agreement in Spain is not only possible but also essential. But, could an agreement like this be applicable in Spain?

The partner manager of the Retail and Consumer Strategy sector of EY-Parthenon, Jose Antonio Latre, answered this question by recalling the considerable differences between the sector in France and in Spain. In France, he said, the first six chains accumulate 90% of the market while in Spain they only concentrate 53% of the market.

“Reaching this kind of agreement would be harder in Spain, as it would leave out a large part of the small and medium-sized distributors,” he stated.

According to data provided by Latre, the large retail sector has a size of approximately 100,000 million euro per year, i.e. some 25,000 million per quarter. Fresh products, which are excluded from the agreement, account for 35% of this value. The agreement would have an impact on the packaged items sold under the brands of the distributors (nearly 50% of all packaged items), which means the measure would have an impact on nearly 8,000 million euro of sales.

“That would be about 3,500 million euro if the six largest operators (53% share) apply it to their highest turnover products (80%),” Jose Antonio Latre stated. Thus, if they applied the nearly 2% reduction against their entire profit margin, the impact would be 70 million euro; a figure that is much lower, for example, than the VAT reduction (700 million).



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