I read in a newspaper recently (one of the English Freebies - possibly Olive Press or Euro Weekly) that the govt is
planning to DISALLOW supermarkets to sell their own brand food.  I.e Stopping the lower pricing?

I am no economist and don’t understand what all this is about.

Surely if the point is to create growth (in any sense of the word), high turn over of cheaper goods, which benefits the end
user/enables them to survive is the way to go?

I have no knowledge of economics so please excuse my ignorance.

I can’t remember the exact wording of the article/the whole topic, only that they wanted to stop the sale of lower priced (own brand)
food.

Does this mean they want us to pay for more expensive branded/imported food?

Back to my original Q .. If we are suffering already, how are we supposed to survive on higher priced food.

:(

I have just found the article - p39 of this edition of EWN

http://www.euroweeklynews.es/virtual-papers/item/111200-costa-del-sol-6-12-december-2012-issue-1431

Comments welcome - as I still don’t get it…. :(

Well thats Mercadona out of the game then since 95% of their stuff is own name brands…!

fb

Si… It’s like saying to Tesco’s or Asda - ‘we are taking away 60% of your revenue income!’
And ‘sod the customers, you are just going to have to pay higher prices!

Grrrr…..

(All of this of course is speculation, but it does make me wonder who is in charge and if they have any idea of
what it is like to be on a tight budget!)

I suspect there is a degree of journalistic sensationalism going on with that report… never let the truth get in the way of a good story… if it was that important I figure it would be on page 1 or 2 rather than 39 or whatever it was!

The government won’t be doing this to stimulate growth, it will be doing it to protect the Spanish food industry.  I have no idea what the likes of Dia and Mercadona do, but I would not be shocked if they were deliberately marking up brand named food at far higher rates than their own brands, and if they happen to end up with a monopoly in certain food products for both the manufacture, as well as, the distribution, I’m sure they won’t feel too bad about it.

The government, in this case, may be acting wisely.  If the supermarkets run the brand name producers out of business, firstly, there will be more unemployment, secondly, there will be less competition.  If they ever do get a monopoly in a product, it would make good financial sense to then raise the price of that good.  This would require collusion of the supermarkets, which should be illegal (I don’t know Spanish law).  I am not saying that any Spanish supermarket would ever collude with another to raise the price of a good, but it has happened in the UK, fairly recently I believe, with milk.

The government needs to strike a balance between allowing consumers to benefit from the cheaper prices offered by own brand products with the need to keep the brand name food industry from collapsing.  In the current environment, I would not have thought this is going to be easy.

RF ^ Thanks for that.

So (likely) more unemployment than there already is?

I don’t think I will ask the ‘big question’ of how Spain got into the mess in the first place/the current status.

The BBC programme by Paul Mason recently was very enligtening
http://www.bbc.co.uk/news/business-19799572

(In fact now I have found out his name, any of his articles are very insightful.)

Slippery business and slippery slope for the man/woman/child in the street it would seem :(

susanspain - 30 December 2012 11:26 AM

I don’t think I will ask the ‘big question’ of how Spain got into the mess in the first place/the current status.

I think three things:

1. A little arrogance and a little vanity to join the Euro, although everyone except Britain thought it was a good idea.
2. Government mismanagement of the economy.  This is a large and complex area, but there were also some obvious mistakes made.
3. A massive negative shock to the global economic system - the banking crisis.