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Price control: does it really work?

Statements by the Vice President Yolanda Diaz about controlled of marketing They have caused a real storm among the food chains. whatreally works cap the price of food to try to alleviate the situation of families? We tell you everything about this controversy.

A very controversial ad.

The situation caused by the COVID-19 pandemic and Putin's invasion of Ukraine has meant that the price of electricity and food has been shot. This has caused the Vice President and Minister of Labor and Social Economy, Yolanda Díaz, to have opened a door for the large food chains to bet on price control by limiting the prices of staple foods.

This measure would relieve many families who are having a really bad time. The measure announced by Díaz provoked a number of supporters, but also criticism. The first food chain to pick up the gauntlet was Carrefour, who announced your own list of 30 products for €30. A decision applauded by many consumers and reviled by others, who see it as a marketing strategy.

controlled of marketing
A person checks his purchase receipt in a supermarket. / Source: BBVA

Criticism of price controls

Yolanda Díaz's announcement about the controlled of marketing He was quickly answered by his government partner Luis Planas, Minister of Agriculture, Fisheries and Food. In his words, this cap is illegal, since these measures must be carried out in accordance with the rules of the free market and the endorsement of the European Union. In addition to the political world, the distributors quickly raised their voices to heaven.

After the meeting held between the ministers Díaz and Alberto Garzón with representatives of the associations that include different consumers and supermarkets, the representatives of the latter explained their refusal to support the measure. According to them, companies already try to contain production costs and they asked the Government to reduce VAT on products and avoid regulations that impose additional costs.

controlled of marketing
A customer checks different foods in a supermarket. / Source: The Courier

Consumers view it favorably.

At the opposite pole are the different consumer associations. Organizations like Facua have requested the executive chaired by Pedro Sánchez to apply the Trade Law and set maximum prices for basic foods. They also asked that the marketing margins of the distribution be capped. This would ensure that the different supermarkets don't take advantage of the lawsuit in crisis situations.

consumer associations they put the “Sarkozy solution” on the table. And it is that during the financial crisis of 2008, the French executive agreed with food distributors a controlled of marketing in basic necessities. This agreement consisted of drawing up a list of ten products, which should include fresh food, it was all a success in the neighboring country. Based on the agreement, each supermarket had to set the composition of said list and the price assigned to it.

list of 30 euros
Carrefour campaign. 30 products at €30. / Source: Carrefour

Price control in other countries

France has not been the only country to bet on the controlled of marketing. One of the most curious cases is Russia. Before the invasion of Ukraine, the different political and economic tensions made Putin impose tariffs on exported wheat. With this measure, he tried to stop grain sales to lower domestic prices. In addition, retailers were ordered freeze the cost of greens and vegetables.

In 2016, Argentina suffered a significant price increase of food. That is why the government of Mauricio Macri decided to combat this inflation through different measures. One of them was the create a website where all prices are indicated of the products in the different supermarkets of the country. The other was to cap the cost of more than four hundred items, including rice, bread, dairy, meat or vegetables.

As we have seen in the article, the controlled of marketing It is a measure that is highly contested by some and applauded by others. And it is that in a time when the war and the pandemic have hit all sectors, each one looks for his own. Even so, they all consider necessary to take measures to alleviate the situation. Do you agree?

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