Spanish households reduced their spending on food and drink last year by 1.8% as a result of inflation. The increase in prices led families to reduce their consumption habits and have to modify the acquisition of basic necessities, according to the employers’ association of the branch and the Ministry of Agriculture, Fisheries and Food, which presented the economic report on Tuesday corresponding to 2022.
Inflation and interest rate rises have forced families to contain their spending. In this way, per capita spending on food and beverages fell to 1,427 euros during the past year. Likewise, the volume of global consumption fell by 1.1%, to 66,294 million, according to the document prepared by the Federation of Food and Beverage Industries (Fiab) and the department headed by Luis Planas.
Households had to reorganize their economy to cope with the increase in the shopping basket and the current and short-term situation is not rosy. Planas himself declared on February 20, after meeting with the food chain, that the price of food had reached a ceiling. The minister stated that he had objective reasons for making that statement. But the inflation data for March indicated the opposite, with a 16.5% increase in the price of food, just one tenth less than the previous month. According to Agriculture, the drought has hit the food industry hard and is causing the price curve to fail to flatten.
“It is true that we were observing a positive evolution” of prices at source, Fernando Miranda, Secretary General of Agriculture and Food, has assured, caused by the decrease in the price of international raw materials. But, he added, the drought makes it impossible to observe a reduction in prices.
“It is a time of great uncertaintyâ€, has warned the high official of Agriculture. Indeed, the forecasts of the State Meteorological Agency (Aemet) suggest that the month of April will have little or no rain in some areas, which will have an impact on the price of food. “If the drought does not throw up dramatic scenarios, the price reduction will come,” he pointed out for May.
The figures for the food industry in 2022 were of a moderation of growth. Real production amounted to 144,955 million euros, reaching an increase of 1.5%, a figure far from the increases of 4.5% prior to the pandemic. Production prices increased 18.6% at the end of the 2022 financial year. The food and beverage industry stands out as “the strongest sector in Spain”. Gross added value was 29,786 million, representing a growth of 13.9%. The sector is made up of 30,159 companies and Catalonia maintains the leadership in the presence of the food and beverage industry, followed by Andalusia.
According to the employer, the measures approved by the Government have ensured that the increase in final prices was not greater. However, its top manager, Mauricio GarcÃa de Quevedo, has criticized the fact that basic necessities, such as meat and fish, were left out of the VAT reduction. He has also estimated the impact of the plastic tax on the food chain at 1,000 million euros per year.
