Elche price war could result in closure

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PRICE WARS: Similar businesses dropped prices to fight for custom during the crisis.

A PRICE war of businesses in Elche is resulting in more and more businesses struggling to survive.

The Association of Elche Services (Aesec) said the price war was created during the years of the crisis as establishments battled for business and it remains today, resulting in a loss of profit margins for businesses. Aesec President Jose Rizo, said: “We had a problem with the crisis and companies reduced the profit margin, but now businesses cannot afford to hire, grow or improve their service.” 

Employers are not all optimistic in proposing solutions to end the price war, which in recent months has led to the closure of many establishments, some with more than 30 years of existence in the centre of the city. “There is no remedy. So to maintain that war it eventually ends in closure,” said Jose Antonio Oliver, manager of a catering business. “We all know what things cost, and the decision of the retail price depends on the owner.”

Aesec is now wanting the city to intensify checks to avoid unfair competition which goes against the industry and against the rights of workers, to ensure prices do not drop too low.

Secretary General of CCOO Union, Carmen Palomar, added: “Small businesses have no union representation, so that workers are in a position of vulnerability, on low wages and basic contracts.”

The unions want more entrepreneurs themselves to report cases of non-compliance with labour standards. 

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