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VAT on olive oil eliminated as prices reach all-time high in Spain
Extra virgin oil has shot up by 69% in Spanish supermarkets in the last 12 months
It’s a staple on every dinner table in Spain but many households have had to forego olive oil in recent months as the price of this so-called ‘liquid gold’ has shot up to more than 9 euros a litre, even for the cheapest brands. But we’ll soon be able to add it to our grocery lists again as the Spanish government has decided to completely eliminate VAT on this coveted product.
In Spain, oil will now be considered an essential food. Before this, the VAT on olive oil was reduced to 5% as part of the anti-crisis measures brought in early last year, but even with this discount it was still unaffordable for many.
After analysing prices in Mercadona, Día, Hipercor, Alcampo, Eroski and Carrefour, the Facua consumer organisation concluded this week that the cost of extra virgin olive oil has increased by 69.3% in the last year, a trend the experts believe will continue until May or June at least.
This unprecedented rise in oil prices is due both to the drought that has cut production by half and the increase applied at points of sale: essentially, supermarkets and stores are charging customers, on average, 2.54% more than they are buying in a litre of olive oil for.
This second point is one that concerns Facua greatly, and the organisation has asked the Ministry of Consumption to open an investigation into the increases in these extortionate profit margins.
But from this week, oil will join a whole host of other VAT-exempt essential grocery products including bread and break-making flour, milk, cheese, eggs, fruit and vegetables, legumes and cereals.
Image: Freepik
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