"The government should have done this more than a year ago," said Isabel Ferreira Pinto, chief executive at the company's main domestic supermarket chain, Pingo Doce. "We will fully pass on the VAT reduction to the price of products." Prime Minister Antonio Costa told parliament on Wednesday his government was working with sector representatives to reduce food prices and acknowledged the possibility of lowering the VAT on food products, without giving further details. The government had previously said lowering the 6% VAT on basic food products was not a priority even as food inflation is hitting households hard. Consumer inflation was 8.2% in February, with food inflation recorded at more than 18% in January.
"The state was the one that most collected (in taxes) and
did the least for the people," Jeronimo Martins CEO Pedro Soares
dos Santos told a news conference, adding that a tax reduction
would restore some of families' lost purchasing power.
The retailer on Wednesday posted a 23% rise in
fourth-quarter net profit as soaring inflation boosted sales
especially in its largest market Poland but also dented its
margins.
Despite high inflation, an economic downturn and rising
interest rates, the company will keep investing in the expansion
of its existing operations and also could enter a new market in
Slovakia soon.
Luis Araújo, head of the Polish unit Biedronka, which is the
largest food retailer in Poland, said many Slovak consumers were
already crossing the border to buy at Biedronka, and the company
has been "looking carefully at Slovakia" for expansion.
"We are prepared to seize the opportunity in a very short
time," he added, without providing further details.
Jeronimo Martins has 2.5 billion euros ($2.72 billion) in
investment earmarked for Biedronka and 1 billion for Colombia
over the next five years, while Pingo Doce would get 1 billion
euros over the next three years, Soares dos Santos said.
($1 = 0.9184 euros)
(Reporting by Patricia Vicente Rua; Editing by Andrei Khalip
and Alison Williams)
