It will be a surprising decision for many mass consumption and food companies, although some lobbyists already see the end coming, especially considering the promises of the Ministry of Economy to Argentina and the upcoming elections. The government plans to extend the fair price scheme, which fixes the value of 1,900 commodities for four months only, for the rest of 2023.
In this scheme, not only were the prices of these products frozen, but the participants -food companies and supermarkets – agreed on a price path for the products they sell outside the scheme: they could only increase by 4% per month. The government guaranteed them access to the exchange market and provided them with a scarce asset: import permits (SIRA).
Weeks ago, Masa also closed deals with other sectors. It provides coverage (not freezing) for the price path for a wide range of goods, from inputs to clothing, to produce imported goods or inputs, and bonds for excess pesos (in addition, it is a way of financing the treasury). Shoes and Medicines.
“We proposed the project in four plus four, eight months in two phases from day one.” Economy Minister Sergio Massa said in an interview with the newspaper profile Released today. Sources in the Ministry of Commerce have confirmed that talks with companies on the official plan will begin in the coming weeks. In companies, they are not aware of this decision.
“This is a common process of working on inflation expectations,” They counted at the economy minister’s small table. “Note that other departments’ new contracts, deliveries for shoes, going into April and dates overlap in the search for coherence and continuity,” they explained and confirmed: “The regulatory framework provides the mandate for this purpose, particularly for 2023.”
In government, they believe that if they maintain fiscal order, reserves can accumulate and if these conditions are met, there can be a plan to index the economy based on price expectations. This process is “sustainable” on the conceptual axis that the interest rate is higher than the expected rate of depreciation and it is higher than inflation. “You have to follow the evolution of all these variables to define the size of the footprints,” they added. For this reason, numbers for the future are not yet available.
“It is a sign of renewing the agreements. Proposals are being implemented and negotiations will definitely start in the coming weeks”, This media was told in the business. “The idea is to maintain a program of fixed prices and routes, perhaps with some rotation of products according to what the companies propose,” they assured the division led by Matías Tombolini.
Massa and Tombolini launched the Fair Prices program at an event at CCK early last November. Today there are 1,900 products across food, beverages, dairy products, personal hygiene and cleaning categories that will keep prices stable for 120 days. It includes a promise that products that entered the program will do so at prices 4% higher than the average recorded for those products by October 2022. Up to 4% monthly for the next four months on the sale price for supermarkets. Indeed, last week, the trade reported that Supermercados Día had breached the contract. They pointed to fines and business closures.
“The truth is, they always talk from November to February, no more.” They told this medium from a food company. But if Precios Justos absorbs Precios Cuidados, it is expected to continue throughout 2023. We will see under what conditions this has not yet been discussed,” they added to the firm.
“(This extension) is not planned,” they pointed out at another food company, which is part of the plan today. “What, he said it was only four months when he signed. No one believed them then,” he said.
“We understand that this may not last for a while because of the general situation. It’s going to be a challenging year, but we will always come together as far as we can import and operate fairly”, Meanwhile, they completed an important mass consumption enterprise in the project.
Nation The ASU (which brings together the big supermarkets) consulted the authorities, but they did not want to comment on the official decision there. Additionally, comments were sought from Gopal (group food companies) but no response has been received from their representatives so far.