The Balearic government's consumer affairs directorate undertook a survey of food prices before and after the Spanish government introduced the cut in VAT (IVA) on fresh food and basic necessities. At one supermarket, which had been charging 2.99 euros for a three-kilo bag of potatoes, the price went up 41% to 4.22 euros. This chain increased prices for three out of 60 products studied by the directorate, while two others put up prices of ten and seventeen products respectively.
The directorate says that the "seven most important" chains in Mallorca were assessed. Félix Alonso, in charge of price monitoring, says that the directorate was able to verify that "VAT had not been lowered on many products and that the price had risen on others". He adds that "we don't have the capacity to keep track of all the products because the food chain is very complex". "We can only make verifications based on data that the companies provide, and they are interested parties."
Alonso explains that some of the "discrepancies" were because the VAT legislation allowed for some interpretation. He gives the example of chickpeas. The price wasn't reduced if these were in jars and had therefore been treated. A "chickpea tax" cut was only being applied if the product was dry and in bulk. The directorate has raised this with the national ministry of consumer affairs in order to find out "who is right". On the whole, Alonso points out, the situation wasn't too bad. Nevertheless, there were some "tricks".
The study, it should be noted, was carried out between December 28 last year (before the VAT reduction) and January 4 (after the reduction). It could be, therefore, that reductions are now being applied more rigorously. But as the consumer affairs department notes - control can be difficult.