Tuesday, December 12, 2023

Inflation slowdown not due to drought

Filling the refrigerator is very expensive, a reality that puts pressure on the entire food chain and extends over time, because the brake on inflation has not yet arrived due to the drought and war in Ukraine, warns the general director of the employer of the food industry, Mauricio García de Quevedo. The Federation of Food and Beverage Industries (FIAB) expects a 2024 that will be “more normal” and that the exceptional situation experienced by some products such as extra virgin olive oil will not be transferred to other products, according to García de Quevedo. .

And he called on an Executive to work for the competition of companies and take the necessary steps to solve this problem and not others that were introduced last year – such as the price cap – which could lead to “disaster. ” .

After the first half of the constant price increase, what prospects do you have at the end of the year?

The second semester is also full of unknowns. We expect a slowdown in inflation that did not come due to the drought and the war situation in Ukraine, the impact of which was exacerbated again by the end of the Black Sea agreement and the ongoing damage. All this has lost part of the crops and translates into expectations that we have experienced a slowdown. We hope in the second semester, once again, with tight margins for the food industry.

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The increase in the price of extra virgin olive oil is in the media spotlight and is one of the concerns of Spaniards at the moment. Could something similar happen in other productions?

If everything continues as it should, I don’t see any other product category suffering this stress. We hope that the situation will relax and that in 2024 everything will be more normal.

“We have to implement fiscal measures and we have a plastic tax, which is a real mistake.”

After leaving a particularly hot and dry summer, FIAB has warned of the impact of drought on the production of various foods. What can cause more water shortage in the structure?

The supply of food products is guaranteed, but the problem is that the agri-food value chain suffers because the main production is done as a result of the drought, because neither the quantity nor the quality required by many cases to get the products. achieved. which we usually have.

We have to resort to imports or other types of issues. At this point, we consider a National Hydrological Plan essential, a more efficient use of water and infrastructure.

The food industry fabric has a unique structure, what does it do in this very complex scenario?

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Pressure on industry margins does not always translate into final sales prices. We have many small and medium-sized businesses and they are suffering the most. Last year, 150 closed, which did not absorb this inflationary situation and, this year, it will be a similar number. All product categories behave more or less the same, so it is the size of the company that is most vulnerable.

All this in the economic field, but we must also add the political situation in Spain.

The political situation only adds more uncertainty to the equation, because there is a lack of a Government that can take corrective measures and help this process.

“In countries where public supermarkets are implemented, this is a disaster and the effect is the opposite.”

What will be the effect if this situation is delayed?

The truth is that we are very worried. We need a Government that is committed to competition. We must immediately implement some fiscal measures and we have a plastic tax, which is a big mistake. There is also Perte Agroalimentario which just failed in the first call. We hope that in the second it will be more flexible and, in principle, it seems that they are up to the task.

The VAT has been lowered but part of the current Government does not seem to have forgotten measures such as limits on shopping baskets and even launched ideas such as public supermarkets. What is your opinion?

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The party proposing these types of measures is the minority party within the Government currently in office. We know that the majority party does not consider them at all. We don’t believe it will happen, because it would be a disaster. In countries where it is implemented, the effect is completely opposite.

The Spanish food industry has experienced a success story in foreign markets. Are you at risk because of the situation of uncertainty and inflation?

We continue to have very significant export capacity. In 2022, we see, however, something that has not happened for a long time, which is a drop in sales volume as a result of the global context.

We believe that this is a temporary matter and it will not affect the smooth flow of our exports. We continue to open markets and continue to have a strong position, selling an average of 35% of production outside our borders. This road will continue.

However, we have two new clouds that need to be resolved: the first, the tariffs in the United States – which remain suspended – and the Brexit in the United Kingdom, which is a real administrative complexity.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com/
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