Is it really worth going shopping in Spain? We did the math and the answer is not (exactly) what we expected.

Is it really worth going shopping in Spain? We did the math and the answer is not (exactly) what we expected.
Is it really worth going shopping in Spain? We did the math and the answer is not (exactly) what we expected.

How much does a bottle of ketchup (250ml) cost in Portugal? 2.89 euros, in the four hypermarkets surveyed by CNN Portugal on January 18, 2023. But, in France, the same ketchup package costs just 0.99 euros. In neighboring Spain, the price is 2.09 euros. And this product is not part of the basket of essential goods where Spanish VAT was withdrawn.

On Twitter, the difference is notable not only in comparison with France, but also with the United Kingdom (

) and consumers wonder why the difference in values.

Over four days, CNN Portugal researched the prices of ten products in supermarkets in Portugal, Spain, the United Kingdom, France, Germany, as well as on Amazon in Spain and Germany and on Primor and Notino.

Comparing the final prices in supermarkets where the ten products were available, surprise: the cheapest basket could be bought in a supermarket in Portugal with a difference of 16.62 euros for the most expensive supermarket, in this case in Spain.

After all, is it really cheaper to shop across borders? Ana Bravo, specialist in domestic economics and author of the book “ABC da Economia”, begins by explaining that the idea that products have a lower value in other countries is an idea that can be placed “in the category of myth”.

A myth that according to the specialist may have its origins in the times when the country was governed by Oliveira Salazar. “Since we were completely closed to the outside world”, everything that was “forbidden was what we wanted the most” and that makes us consider that “what others have is always better”. But reality is not necessarily like that, he explains, concluding that this is “one of those things that I would definitely put in the myth category”.

Warning that more than focusing on purchases abroad, the Portuguese should be concerned with keeping alive the maxim “that what is national is what is good” to help develop the economy, Ana Bravo also warns that the “noise” created on social networks with the price of a certain product cannot be seen as an example because, often, when you do a broader search, the conclusion shows that the part does not correspond to the whole, that is, “one product will happen or another , be more economical”, but in the end it doesn’t pay off.

“That happens in our mind quite often. We think that since we once encountered a situation, everything is that situation. And it’s not. That’s a tendency, a way of being uninformed. It’s easier to think like that than to do, go research. Much more important than being focused on product A, B or C, which we order from Spain or England, wherever it may be, and which is cheaper for us, is thinking that the more we consume here, the more we are fueling the Portuguese economy”, he explains.

Ana Bravo also explains that the difference in prices in Portugal may be related to the way they are purchased, if they are purchased raw and packaged here, “this means that the cost of a product that comes from abroad is not equal to that that is purchased as a final product”.

“There are many products that, despite coming from abroad, do not come in their packaging. We have a large packaging industry in Portugal and many things come and are then packed at their destination. Therefore, this situation also has a great impact on the price of things” , explains the specialist.

In addition, the Portuguese standard of living also has an impact since “prices are adjusted to the country where they are, otherwise there were products that were sold at a price in a certain country that if they came here at the same price, nobody would buy them”.

“The formation of the price of a product has many items”

The general director of the Portuguese Association of Distribution Companies (APED), Gonçalo Lobo Xavier, also underlines the theory that the analysis of prices between countries cannot be done in such a linear way and that it is necessary to take into account that “the cost of the product is not only measured by the value at which the product is sold”.

“We are in Portugal with completely different costs than in other countries. The formation of the price of a product has many items: there is transport, there is logistics, there is the cost of packaging and, therefore, things have different prices in France , as they have different prices in Portugal. It is not serious to do a stricto sensu analysis based on social networks or even a survey, because if the industry sells this product to us at a higher price than it sells in France, it is because the industry is incorporating the costs of production factors, which are naturally different in France. The cost of transport is different, the price of energy, the price of diesel is different, the price of transport is different”, explains Gonçalo Lobo Xavier.

The general director of APED also states that the difference in prices has nothing to do with the profit margin of food retail which, he guarantees, both in Portugal and in France are in the order of 2 to 3%. “The differences between the countries have to do with the distribution chains themselves and with all the links in the chain: the producer, the industry, the packaging, who transports, the logistics, the prices. Evidently, we also have products that are much more cheaper in Portugal than in France, or in other countries and the principle is exactly the same”, he concludes.

“You have to be very careful”

Gonçalo Lobo Xavier reiterates several times that “one has to be very cautious in comparisons” because these “do not analyze everything”. They do not analyze everything, but they reveal some prices that are lower than those charged by hypermarket chains in Portugal and in some cases are available through online ordering, as is the case with platforms such as Primor, Notino and Amazon.

The director general of APED justifies this difference in prices with the fact that they are “international chains that do not pay taxes in Portugal and do not have the same tax burden” that Portuguese operators have.

“Right there is a big difference, we would even say that it could be unfair competition because there is a completely different tax framework in terms of VAT, in terms of IRC, in terms of all the taxes that are associated with the cost and the tax burden that operators normal people who are in Portugal have to pay. So, there are indeed differences here and that even, in some cases, make our associates quite uncomfortable”

Lobo Xavier says that he understands, however, that consumers resort to these platforms to “benefit from this absence of paying taxes that these companies have”.

In turn, Ana Bravo says that purchases on this type of platform can represent “a financial advantage” only in some products, but “does not mean that, in general, it is cheaper. In 100 products it happens to 25. That is, it does not mean which in general is more economical”.

For the specialist in home economics, this ends up being “poor time management” because we stop “looking at other things that are expensive for us”. That is, when all the costs are weighed – fuel spent on shipping included – it may not be so rewarding to order purchases on these platforms and, for Ana Bravo, what “interests is that, in our basket in general, purchases are well weighted in terms of Portugal, and if decisions are taken that, in general, for that basket, it will be more economical for us than ordering it from abroad”.

From the absence of taxes to the absence of VAT in Spain

On December 27, 2022, Pedro Sanchez announced that the Spanish government was going to reduce VAT on basic food products to 0% for six months. The measure quickly echoed across Portugal, not by imitation, but because many were the voices that rose to ask that it be applied here, saying that it would even be possible to save 400 euros.

APED says that “this possibility was studied in Portugal by the Government and in technical meetings” at the end of August and beginning of September, and that the decision not to proceed with the withdrawal of VAT was taken by the Executive because “it understood that it did not want lose that tax revenue”.

Recalling what happened with the reduced VAT rate on butter, margarine and vegetable creams obtained from products of vegetable origin, Gonçalo Lobo Xavier guarantees that the Association is prepared to do what the Government indicates, not least because the members are aware that ” the VAT issue makes a lot of difference” and will have an impact on the Portuguese wallet.

“If the Government understands that it should apply the measure in Portugal, we will do what the Government indicates, which is to remove the VAT on these products and the final sale price will decrease in the relative proportion of the lower VAT as well. And this is a measure that it has effects. I wouldn’t say that the day after, because there are procedures and there are products in stock, etc. But, in the short term, the price would drop almost immediately with the drop in VAT. The Government just hasn’t taken this yet measure because he didn’t want to and because he understood that he didn’t want to lose that tax revenue”.

Pointing out that this is a decision that is up to the Executive, Lobo Xavier clarifies that all the information that was requested for the decision to be taken has already been made available. And he also guarantees that associates “are available to accept this decision and to act accordingly and embrace this benefit for the customer”.

Essential basket more expensive 37.11 euros than last year

The drop in VAT is not certain, but the appeals continue, as well as the crossing of the border to go shopping in Spain (and filling up the car with fuel), a movement that is not new.

Ana Guerreiro, from Deco Proteste’s Institutional Relations, even says that, “historically, those close to the border have always taken advantage of the time to go shopping and, long before the increase in fuel prices, it was always cheaper to go to Spain to do the shopping for groceries and filling up the car”.

“With these significant changes in the price of supermarket products and fuel, it is natural that these people, these consumers who are closer to the borders, take the opportunity to make these purchases”.

Significant changes that, according to Ana Guerreiro, weigh heavily on the Portuguese wallet and already force them to make choices when it comes to shopping. According to the price analysis of the essential food products basket, consisting of 63 products (meat, frozen products, fruits, vegetables, dairy products, groceries, fish), between January 19, 2022 and January 18, 2023, the price increased by 37.11 euros (19.79%).

“And between February 2022 and Wednesday, the basket costs more than €41.04, therefore, more than 22.35% compared to the beginning of the year. Therefore, with the war, with inflation and prices have effectively here to increase. In January, with a variation of 16.89% and now with this one of 22.35%”, he explains.

Asked whether the solution for reducing prices in Portugal would be to reduce VAT as it happened in Spain, Ana Guerreiro says that it is difficult to compare because the realities in the countries depend on several variants.

“In Spain there was this reduction in the VAT rate, in Portugal this still does not happen, nor in other European countries. And comparing, there is always a double face here because there are different national minimum wages, quality of life, access to products, VAT rates”, he says.

It is certain that, in Portugal, this year alone, the price of products in the basket of essential goods increased by 2.4% (5.27 euros), according to Deco Proteste accounts to which CNN Portugal had access.

2023-01-25 07:00

Andreia Miranda

The article is in Portuguese

Tags: worth shopping Spain math answer expected

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