The newly approved price control decree by the Spanish government has faced significant backlash from major retail associations including Carrefour and El Corte Inglés, which argue it is ideologically driven.
On Tuesday, the Spanish government approved a royal decree-law allowing it to cap the prices of services or products during emergencies. This decision, proposed by Minister of Social Rights Pablo Bustinduy, has sparked immediate outrage from various business sectors, particularly within the large retail market. Key provisions of the decree state that during emergencies like the Adamuz accident or Dana event, prices cannot exceed their maximum levels from the previous 30 days or be more than 50% above the average price over those 30 days.
Organizations representing large supermarkets, including El Corte Inglés and Carrefour, have expressed serious concerns through a deeply negative legal analysis of the new law. They argue that not only does the law unfairly target their operations, but it reflects a broader ideological stance rather than addressing actual market needs. Bustinduy has indicated that the government could cap prices in emergencies defined not just by civil protection but also by the Council of Ministers, giving the state considerable authority over pricing strategies in various situations.
The implications of this law could be significant for the retail sector, as it might discourage investments and distort market dynamics, potentially leading to negative consequences for consumers in the long run. The backlash from powerful retail associations indicates a deeply polarized debate over the role of government in economic sectors, particularly during times of crisis, suggesting that further negotiations and adjustments to the law may be necessary to mitigate these tensions and foster a more cooperative environment between the government and the business community.
