Ignacio Silva (Fiab): "It is absurd to say that entrepreneurs are lining up, margins are falling"

Ignacio Silva is president of the Spanish Federation of Food and Beverage Industries (FIAB) since December 2022. He is still landing in the position, but he plays with the advantage of knowing the house and the associationist world well. President and CEO of Deoleo, he has three decades of experience in the sector to now face a stage of maximum uncertainty due to the political and economic situation and great complexity for companies.

What will be its main lines of action? In the political and economic environment they are going to be special months, but our priorities cannot change. The recognition of the food industry in this country has to do with developing policies for SMEs. We have to defend the image of a sector that has been defined as strategic by the President of the Government himself. Competitiveness, sustainability and size. And we have to pay attention to inflation. We want to be part of the solution and not the problem. That is our philosophy and we are going to work with dialogue with the Government to solve it. And there are the elections... Electoral processes disrupt democratic states, especially in cases of coalition governments like ours, where the different factions are not aligned, each one thinks about its electoral campaign and defends the party it represents and not the Government of which it is part. It is a complicated moment that will cause my agenda to be more convulsive than normal.Is the VAT reduction approved enough to contain inflation? We said it from the first moment: if meat and fish were not included, the effect would be very small. The impact is three points on the total feed. If the VAT on meat and fish is reduced, it would go from 16% food inflation to 13% and the general CPI would fall one point. We put it on the table ad nauseam, but it was ignored. They are trying to convince us that it is a margin inflation and it is a lie. It's about costs. Margins are going down. When a company is forced to raise prices, its turnover grows. Companies live on productivity and when they reinvest they generate work and economies are doing well. If that circle is broken, wealth is not generated. Last year, the food and beverage sector saw its energy costs increase 3-fold. Retailers defended their prices, trying not to raise them, and margins went down. The environment was terrible last year and will be bad this year. Although there may be tailwinds in the second half of the year, but they will only increase costs less, not decrease. I insist: we are facing an inflation of costs, not margins, and what is happening is that it is being transferred to the economy, as it cannot be otherwise. We forget about the side effects: the net effect of VAT could not be seen in the first quarter because the same day that VAT fell in some categories, the plastic tax went up. Who is explaining this net effect? We cannot deceive the consumer and generate expectations that are not met later, because he gets angry.How is the plastic tax impacting companies? This tax is not understood in the sector. It involves administrative obstacles that generate costs, especially for SMEs, which are not prepared to assimilate it, so it reduces productivity. Don't get it wrong: we are not against climate change. We have been working on sustainability projects for years and really focused on leaving a better economy for the future. But you don't have to be first in class when this country has a lot more problems. Spain, voluntarily, has implemented the tax a year earlier. The Italians postponed it. Why not us? More reflection needed, analysis What conclusions did you draw from your first meeting with Planas? A great will. The minister has defended the food sector as much as he could, to the limit. And it continues to do so. And he is also a great technician and understands the sector perfectly. He also met with the president of the CEOE. What will be the joint line of action? Garamendi's problems are the same as those we face, but on a larger scale, unfortunately. And the first is dialogue and transparency with the Government. There are major differences between government ministries, often with totally opposite objectives. Therefore, I insist that we need dialogue, understanding and collaboration to be part of the solution to the problem. The increase in costs has not been exactly the same for all sectors. Sales volumes are also falling and we are losing competitiveness. I am not alarmist, but the situation is very complicated. Although there are tailwinds, there is general uncertainty. Investments are scary. That has been put on the table by a company. Legal uncertainty is the worst enemy we can have. Money has wings and flies somewhere else. You are referring to Ferrovial Do you think that in Spain there is a problem of legal uncertainty? Yes. Too much is being legislated and that generates insecurity. When you do not know what they are going to legislate, why, when and how, it generates insecurity.Do you think that the entrepreneurs of the sector are "lining", as they claim from a part of the Government? It is a political discourse. As an economic discourse it doesn't make any sense. It is absurd. That's not true. Are they increasing turnover? Yes. Are they opening stores and therefore selling more? Yes. Are there companies that do better? Yes, because they do it better. But, in general, all have done badly because their margins are falling and their profitability, which is what allows them to look to the future and continue investing, will also fall.The president of Mercadona admitted that he had had to raise prices "a joke". Exaggerated? Mercadona is a model of success, like so many we have in this country. If Mr Roig says that they had to raise prices 'a bummer', I am convinced that it will be that they had to raise them a.Do you see feasible a pact 'a la franrada' in Spain with supermarkets? It is very difficult because of the fragmentation we have in our country in the food sector. It is something that does not exist in France. Are we talking about commodity promotions? Look at the level of promotions in any supermarket here. It is nothing different from the logical application of the promotional system in countries that have many food chains. The Government has opened up to adopt more measures, but PSOE and UP do not agree on which... The extension of the VAT reduction, aid to companies and the flexibility of regulation. These are three key aspects, which generate many costs upstream and which would be transferred to productivity and prices. We are in a free market economy and that is what the two factions of the government disagree on. That is why the measures are so divergent, because they do not agree on the biggest one. Why do we do this, to control these capitalists or to solve the problem of inflation? We must reflect economically, without political overtones, and then, Take the measures. President Sánchez has asked companies for more transparency about their margins in collective bargaining. What do you think? You will find us in any exercise of transparency. The CEOE is working on linking wage increases to productivity and absenteeism. Let's share the benefits. In that there must be an entente cordiale. The unions also agree to improve the productivity of companies, which is what in the end guarantees the future and wealth of the country.

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• Feeding
• Enterprises
• Inflation