ASAE strengthens actions to halt increases of 50% in food margins

The government yesterday announced a plan to regulate food prices, which continue to rise despite inflation falling to 8.2% in February. One of the actions is to step up supervision by the Food and Economic Security Authority (ASAE) to understand “what is the cause of the price difference”, the Minister of Economy and Sea said at a press conference yesterday. António Costa Silva said “abuses” could be at stake and, if they exist, “should be punished”.

“The distribution and retail sector is always on the side of the solution and does not mislead consumers,” assured the industry association in response, which regretted not being heard or even informed of the existence of the ASAE report. And he makes sure that the problem lies in the price at which the products reach this stage of marketing, rejecting the idea of ​​speculation in distribution.

The economy minister accompanied ASAE’s Inspector General, Pedro Portugal Gaspar, who presented a report showing that since 2022 and until February this year, the basket of essential goods has increased by about 29%, from 74.9 euros in January 2022, last month to 96.44 euros.

ASAE began inspecting food prices in supermarkets and hypermarkets in September last year, involving 38 brigades and 80 inspectors. Since the start of the actions and until yesterday, March 9, 68 criminal speculation proceedings and 105 administrative infringement proceedings have been launched against 960 market participants.

The executive’s position deserves the applause of DECO Proteste, although the association cannot stop lamenting that it happens when food prices are already weighing too heavily on the Portuguese’s wallets. “The monitoring that DECO Proteste is doing shows the situation that the minister sees today,” accuses Rita Rodrigues. The association’s Director of Communications and Institutional Relations says the government initiative is important, but “oversight, monitoring prices, strengthening ASAE and talking to the operators’ industry is all that should have been done months ago.”

Rita Rodrigues also calls for an intervention by the Competition Authority, as she believes that there is “a problem with the transparency of prices”. “This is a sector in which there is no transparency throughout the chain,” he emphasizes, assuming that while the association has no solution that could help to lower prices quickly, “there should have been an inspection rhythm that would allow have reached this point”. And it refers to DECO Proteste’s latest analysis of a basket of 63 essential food products, which was worth €230.76 yesterday. That same basket had an increase of 25.66% on March 9, 2022, which is another 47.12 euros. It is the highest price since this basket was checked on January 5, 2022.

While presenting the executive’s strategy to combat price speculation, based on six points, António Costa Silva also indicated that the government will meet with the operators to hear their explanations and verify whether there are any discrepancies that could lead to abuse. form that, if confirmed, it will receive an “inflexible” response from the government, the minister stressed.

At the same time, the government says it will look at the entire chain of changes in food prices, starting with production and through distribution, all the way to when products are finally placed on the shelf. PARCA – Platform Monitoring Relations in the Agro-Food Chain will also be convened.

APED guarantees industry is “absorbing costs”

In a statement, the Portuguese Association of Distribution Companies (APED) “regrets that ASAE has produced a report of which the sector is neither aware nor invited to contribute”, although it has always worked with the agency. And he says that, given the information from the Minister of Economy, “it is necessary to speak the truth to the Portuguese and clearly explain all the factors leading to the rise in food prices”. The association reveals that it met with the government on Wednesday, after explaining the reason for the increase and what is happening across the value chain.

During yesterday’s press conference, Pedro Portugal Gaspar said that it is necessary to know if there are any signs of speculation, because according to ASAE data, the average gross profit margin of, for example, onions has increased by more than 50% and that of eggs, oranges, carrots and pork ribs increased by 40% to 50%.

APED guarantees that distribution buys increasingly expensive products from suppliers (industry and manufacturing) and that these increases, at the beginning of the chain, “reflect the increase in the costs of factors of production resulting from increases in the prices of fertilizers, rations and other relevant commodities costs”. As an example, milk “is 75% more expensive in the store, exactly the extra price that suppliers passed on to distribution” – this is a product with minimal margins. The Minister of Economic Affairs had revealed that the costs of fertilizers, fuel and electricity had fallen and that the increase in food prices could not be attributed to these factors.

APED reiterates: “The distribution and retail sector is always on the side of the solution and does not mislead the consumer”, and that food distribution focuses on volume, not margin. The average margin in the global food retail sector is around 2 to 3%, while industry margins are around 15 to 20%, he adds. The association assures that food retail has not increased sales margins, but on the contrary has reinvented itself to “capture the general increase in operating costs, preventing inflationary pressures from getting much higher overall for consumers”.

Mónica Costa is a journalist for Dinheiro Vivo