Spain’s supermarkets battle against regulations

Can Spanish supermarkets continue to bear the weight of escalating rules and regulations?

This question comes to the fore as industry leaders voice their concerns over what they describe as excessive legislative demands.

On Monday, March 18, Juan Manual Morales, the general director of the IFA Group and president of EuroCommerce, voiced a stark warning: ‘The sector will not endure many more regulatory costs.’

He highlighted the slim profit margins within food distribution, which ‘earns two cents on what it sells’, and condemned the sector’s plight as one of ‘unfair overregulation.’

A torrent of regulations

In 2023, companies faced the daunting task of implementing over a thousand new or amended regulations, according to estimates from the Spanish Association of Distributors and Supermarkets (ASEDAS).

This translates to an average of 2.7 new regulations every day, with a significant portion originating from regional authorities, Brussels, and the Spanish government.

Environmental policies

The push towards environmental sustainability has resulted in numerous financial implications for retailers. The introduction of a tax on single-use plastic packaging in January 2023 and the VAT increase on sugary drinks from 10 to 21 per cent are prime examples.

These measures, coupled with others like the tax on fluorinated gases and large commercial establishments, have significantly raised operational costs.

Sources from the National Association of Large Distribution Companies (ANGED) criticised the lack of empathy from lawmakers, stating, ‘It breaks market unity and penalises Spanish companies.’

Spain: Second country with most restrictions

The European Commission’s ‘Retail Restrictiveness Indicator’ places Spain as the second most restrictive country for commercial activities, highlighting the extensive regulatory landscape businesses must navigate.

Despite acknowledging the environmental goals of these policies, industry voices such as ANGED and ASEDAS call for more rational regulations and stress the importance of dialogue and impact assessments in the implementation process.

With the regulatory landscape in Spain presenting significant challenges for the retail sector, the calls for a more balanced approach to legislation are growing louder.

Stakeholders argue for a framework that fosters environmental objectives without stifling economic growth, advocating for greater coherence and dialogue in regulatory practices