Carrefour unveils 30 euro shopping basket in Spain after government price cut proposal

Published On : 09/08/2022

MADRID (Reuters) – Supermarket chain Carrefour will sell Spanish consumers a basket of 30 basic goods for 30 euros, the company said on Wednesday, days after Spain announced it was considering asking big retailers to offer special price packages to mitigate inflation.

The government’s announcement was met with criticism by Spanish business groups and some politicians who view the move as the government engaging in price intervention.

Labour Minister Yolanda Diaz, who announced she was seeking agreements with supermarkets on Monday, has denied these criticisms, saying it will help impoverished families continue to eat healthily.

Diaz, one of Spain’s three deputy prime ministers and the most senior government official from its junior, far-left coalition partner Unidas Podemos, told Spain’s Eldiario.es news outlet an agreement would determine a basket of basic products in which they can set prices.

French retailer Carrefour – the second-largest grocery chain in Spain after dominant Mercadona – said it hoped to bolster the purchasing power of Spanish families. The exclusive basket offer will include tinned food, pasta, oil and coffee among other products.

The main employers’ association, the CEOE, denounced Carrefour’s move as “soviet,” while Spain’s agriculture minister, a member of coalition leader Socialist Party (PSOE), said under European law, price interventions could only be adopted in regulated markets. The agri-food sector has called for a food tax reduction.

Diaz told journalists on Wednesday she had never mentioned price interventions, but rather “an agreement between retailers and consumer and user associations to do something… completely legal.”

Government spokesperson Isabel Rodriguez said on Tuesday the government backed Diaz speaking to supermarkets.

Inflation hit 10.3% in August in Spain. In July, flour marked a price rise of almost 40%, and pasta, eggs or milk exceeded price increases of 22%.

Carrefour and Diaz will meet on Thursday, and Diaz will meet retailers’ associations and consumer groups on Monday.

In August, Carrefour said it was freezing the price of 100 products in France, from tinned sardines to rice and washing up liquid.

Spain’s government has already committed 30 billion euros to measures aimed at high energy costs such as with fuel rebates and VAT reductions for gas and electricity.

In June, Spain capped the price of gas used to produce electricity, a move now being studied for replication in the rest of the bloc’s countries.

Another popular measure has been the launch of free rail passes and discounts on public transport in cities.

(Reporting by Belén Carreño and Emma Pinedo; Edited by Aislinn Laing and Josie Kao)

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