Spain's food industry has repudiated claims that it is acting to manipulate or fix prices as rising raw-material prices squeeze profit margins.

"There is absolutely no anti-competitive, manipulatory or monopolistic behaviour going on," a source close to leading trade federation FIAB told just-food today (14 September). "The industry has simply said that rising raw material costs will have to eventually be passed on to consumers."

Spain's competition watchdog CNC said yesterday that it will investigate "anti-competitive" behaviour after leading companies - notably in the bread sector - simultaneously said food prices will have rise by up to 30% in the coming months, following a sharp increase in raw material costs. CNC officials could not be reached for immediate comment.

The watchdog has yet to accuse the food industry of any illicit behaviour. However, financial daily Cinco Dias on Friday quoted industry executives insisting that the sector has not engaged in any illegal or "price fixing" activity.

Meanwhile, Madrid-based consumer watchdog ASGECO backed the CNC's inquiry. "We don't think their timed announcement to raise prices constitutes price-fixing but it is strange," an ASGECO spokesman said, adding that the bread federation's desire to raise prices 30% was unfair.

"Cereals account for 10%-15% of production costs and they haven't risen that much to require such an increase" the spokesman added.