Food loses in China and partially wins in Mercosur

Tensions over Spanish food exports. This is the focus of this week's EXPANSIÓN Newsletter on Food and Distribution.

It's not just Trump's tariffs that are complicating international food trade. China is also imposing barriers to the entry of pork products, which greatly affects Spanish exporters, while efforts are being made to offset the impact through a free trade agreement with Mercosur, which pleases many, but not all.

The European Union will soon ratify a free trade agreement with Mercosur—which includes Argentina, Brazil, Paraguay, and Uruguay—that dismantles a large portion of the tariffs that have previously weighed on European products entering those countries. Spain, and specifically the food sector, benefits from this agreement, as products such as oil and wine see reduced entry barriers and are highly valued in that market . Products such as wine, soft drinks, sparkling beverages, and other alcohols currently bear tariffs of up to 35%, while chocolate, pastries, and cookies have rates of around 20%, cheese is taxed at 28%, and olive oil at 10%.

A few months ago, Economy Minister Carlos Cuerpo estimated that oil and wine exports could increase by between 40% and 50% once the agreement with Mercosur is ratified.

In terms of companies, the agreement creates a large potential market for meat companies such as ElPozo or Campofrío , oil giants or large wineries and firms such as Freixenet or Codorníu .

But not everyone is happy. The primary sector emphasizes that the tariff reductions work both ways and could be a disservice to Spanish farmers and ranchers. "It will mean the entry of more imports with tariff advantages under conditions of unfair competition, replacing our agricultural products, which do guarantee the highest standards of freshness, phytosanitary safety, animal welfare, and sustainability," says Cristóbal Aguado , president of the Valencian Farmers Association (AVA). He adds that "given the high number of interceptions of pests and diseases accumulated by Mercosur shipments, this opening will increase the risk of introducing new pathogens that threaten to destroy our plantations," and points out that the agreement does not include a modification of the sanitary and phytosanitary requirements for imports.

For its part, the Citrus Management Committee emphasizes the danger to the Spanish juice industry . It points out that Brazil is the leading juice processing powerhouse, that its juices account for around 70% of global consumption, and that Spain is the leading fresh fruit exporter. Even so, the EU has not considered this product as a sensitive product when establishing restrictions.

While the agreement with Mercosur is presented as a relief for Spanish food exports after the blow from US tariffs, Chinese trade protectionism has thrown another cold shower: Wang Wentao, China's Minister of Commerce, has announced that the Asian giant will take preliminary measures against European meat companies it accuses of dumping practices in the country, something it will now penalize by imposing severe tariffs, considering that it causes "material damage" to its industry.

Trade levies range from a minimum of 15.6% for the Spanish company Litera Meat to the 62.4% levied by all unlisted European meat companies.

Most Spanish companies, including giants such as ElPozo and Campofrío, will see their exports subject to trade taxes of 20%, a mid-level rate within the Chinese document, but equally damaging. The list also includes other firms such as Sánchez Romero Carvajal Jabugo, Montesano Extremadura, Embutidos Rodríguez, and dozens of other names, both Spanish and from the rest of Europe.

Farmers have also come out to protest this situation, and are attacking the EU: Asaja accuses community leaders of "sacrificing the pork sector due to tariffs on Chinese electric cars," as the Asian giant has responded to the restrictions on Chinese vehicles with pork restrictions.

The Food and Distribution newsletter also covers the evolution of regional supermarkets in Spain, the impending restructuring at Unilever , and the pressure from Elliot Management to force changes at PepsiCo .

Also results from companies such as ElPozo and Grefusa , or the entry of Torre Oria in Rioja.

These are some of the topics covered this week in EXPANSIÓN's Food and Distribution Newsletter , which you can receive in your email every Wednesday .