The conflict in the Middle East has an inevitable economic cost. In Mallorca, the hauliers were the first to warn about rising costs and the consequences for consumers. The island's builders then voiced their concerns about the costs of materials and about a slowdown in construction. The distributors have now added to the anxiety.
Bartolomé Servera, president of the Balearic Islands Food and Beverage Distributors Association, says European manufacturers have sounded a warning about rises in food prices. He points out that Spanish manufacturers have yet to increase prices, "but it won't be long".
The extent of the price increases is still unknown, as this will depend on the duration of the conflict, but Servera adds that "it will be worse than in 2022, when the war in Ukraine began." Inflation in Spain topped ten per cent in July 2022. With this conflict, the impact could be much greater (again depending on how long it lasts). This is especially due to the passing of 20% of the world's oil and gas through the Strait of Hormuz.
Reflecting what the hauliers said a few days ago, Servera explains that transport companies have begun increasing prices. Diesel, for instance, has gone up by 32 cents per litre, just over 20%. All food items will be affected. "Milk, eggs, bread, fruit ... . Everything needs fuel and electricity for its production and transport, so they won't escape the escalating costs, and producers will have to pass them on to consumers."
As it did at the beginning of the war in Ukraine, the Spanish Government is working on an aid package to alleviate price increases. The consumer affairs minister, Pablo Bustinduy, says the government "will intervene to protect families and the working class". "We will do so, and it is very important to be able to control prices. The government is developing a package of measures to protect citizens from the impact of this illegal war on the cost of living and energy."