The increase in freight prices of up to 20% by the Baleària and Trasmediterranean shipping companies will result in widespread redundancies according to the the National Association of Large Distribution Companies, or ANGED.
“We cannot have different prices of the same products in each autonomous community, since the advertising campaigns are statewide. Prices in the Balearic Islands will not be raised unilaterally due to the increase in sea freight from the Peninsula to the Islands,” ANGED representatives said on Friday.
“If the situation does not change, we will focus on staff cuts and new employment contracts, maritime and transport costs are very expensive and the increase on January 1 will be compensated at labour level.”
CAEB and PIMEM
The President of the Business Association of the Balearic Discretionary Merchandise Service of Majorca, Ezequiel Horrach, says companies cannot afford to absorb the extra costs.
“The increase in freight rates will be passed to customers because we cannot assume a cost of 80 million euros per year, it is impossible,” he said.
The President of the CAEB, Carmen Planas, said the freight cost increase would undoubtedly lead to layoffs on the islands.
“The dependence of the Balearic Islands on the maritime transport of goods is conditioned by its insular nature, hence the increase applied since the beginning of this year will undoubtedly have a negative effect on prices borne and on employment,” she said. “People know that bad news for the economy is bad news for employment."
Jordi Mora, President of the PIMEM, says small and medium-sized companies will have to pass on the extra costs to customers.
“There will be an increase in product prices and that will affect the purchasing power of consumers. Employers will maintain the current price levels by reducing the workforce to stay afloat economically,” he said, adding that "more competition on the sea routes with the Peninsula is needed and an end to insularity costs is vital.”