The president of the distributors association in the Balearics, Bartolomé Servera, says the prices of dairy products will rise by up to seven per cent over the next couple of weeks. Dairy producers are the first to raise their prices for distributors, but "everyone will". He adds that producers are holding out as long as possible before raising prices, but the conflict in the Middle East shows no sign of coming to an end.
The increases in oil and gas prices mean that producers will be left with no choice but to raise their prices. Servera is of the view that the situation will be worse than in 2022 when the war in Ukraine began. Inflation touched almost eleven per cent in July 2022, but the impact on inflation, he believes, will be much greater this time, if the conflict continues.
Joan Mayans of the service stations federation reports that the general prices for petrol and diesel are €1.796 and €1.918 per litre respectively, meaning that the cost of filling a tank has gone up by over ten euros for petrol and more than 18 euros for diesel.
For the supermarkets, according to Alfonso Rodríguez of the Consubal consumers association, price increases have yet to be passed on to them. "The prices of a typical shopping basket in Mallorca remain within similar ranges to those before the start of the conflict." He notes that some fresh products, such as bananas, have gone up in price but that, for now, these have only been slight. But Servera has clearly sounded a warning that price increases are imminent.
Carles Tarancón, secretary general of the association which represents the main supermarket chains in the Balearics, says "the competitive model we have in Spain, where a consumer has several supermarkets available just across the street, is sufficient guarantee that food prices will rise as late and as little as possible; as has been demonstrated in the past". He makes a plea for shoppers not to hoard food. "This is not only unnecessary, but would also add a strain to the supply chain."
At a meeting of the cabinet this coming Friday, the Spanish Government is due to approve its comprehensive response plan to the war in the Middle East. The government's delegation in the Balearics says this plan will protect the most vulnerable and the sectors most affected by rising prices.
Rodríguez believes the government should "cap electricity and gas prices and lower IVA (VAT) on some products". He insists that "businesses should be monitored to ensure that the reduction is applied and so prevent a repeat of what happened at the beginning of the war in Ukraine, when most businesses did not apply the reduction and instead increased their profits".