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Date Published: 30/09/2024

Olive oil and basic groceries in Spain shoot up in price from October 1

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Supermarkets across Spain will hike up the price of everything from pasta to bread

Olive oil and basic groceries in Spain shoot up in price from October 1

Shoppers, prepare to feel a real pinch from Tuesday October 1 as Spain is planning to partially reverse the VAT cuts which have made groceries marginally more affordable over the past few months.

This measure was actually extended in June as the powers that be acknowledged that the cost of living crisis hadn’t quite abated, but now it’s coming to an end.

So, from this week, the VAT rate on olive oil and basic foodstuffs will rise from 0% set in July to 2%. These basic foodstuffs include bread, flour, milk, cheese, eggs and fruit, vegetables, tubers and cereals. In addition, the tax rate applied to seed oils (such as sunflower oil) and pasta will rise from the current 5% to 7.5%.

A quick calculation based on online sales prices in various supermarkets provides clues as to the impact that the rise in VAT on these products could have.

Unsurprisingly, the biggest drain on our wallets will be olive oil, which comes in at just shy of 7 euros in most supermarkets (that’s the white label option). An increase in VAT to 2% would automatically imply an increase of 14 cents in the price of a litre of 'liquid gold'. In the case of sunflower oil, a litre bottle will go from 1.45 euros to 1.48, which is just a three cent increase.

In the case of milk, a six-pack of litre cartons today comes in at 5.40 euros but this will rise to 5.51 euros tomorrow, while a dozen eggs will go from 2.19 euros to 2.23 euros. Finally, a box of dried macaroni will increase from 1.18 euros to 1.20 euros.

These slightly higher VAT rates will remain in force until December 31 but from January 1 next year, all prices will return to what they were before the inflationary crisis. This means that Value Added Tax on essential foodstuffs will jump up to 4%, while VAT on pasta and seed oils will be set at 10%.

The only exception is olive oil, which will be permanently set at 4% (it was previously at 10%) after recently being given the status of basic food.

Thankfully, food inflation is coming under control so this should cushion the blow for consumers somewhat. In fact, during September, consumer prices grew by a mere 1.5%, the lowest figure in more than three years.

In other news: Shrinkflation strikes again: Spanish supermarkets reduce package size while increasing prices

Image: Freepik

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