A few days after the end of January, the government already has indications that this January’s inflation is lucky to be higher than in December. The consultants are considering the possibility of registering an increase 5.5% or 6%, thus distorting the slowdown trend proposed by Sergio Massa’s management.
For this reason, before the end of the current Fair Prices program, which has frozen the prices of about 2,000 consumer products, the Secretary of Commerce try to prevent sharper rises in the rest of the products which have an upward path of around 4%.
puts to company that this adjustment is 3.2% instead of 4%. And also advance in the definition of the new basket of frozen prices that will replace the one expiring on February 28th. The meetings have just begun and promise to be tiring, according to the companies.
The official willingness to inflate corsets occurs, not only because of the context in which we are going through an election year, but also because of the need for unions to sign the annual parities within a margin of 60%, as required by the 2023 Budget on inflation.
The Secretary of Commerce pointed out that “there have already been meetings with companies and supermarkets. They are useful,” a source described. On the other hand, industry representatives attending face-to-face meetings with secretary Matias Tombolini admit that there is still a long way to go. the toughest battle: the recomposition of frozen food prices for four months.
“Since November we already have almost 11 points of inflation and we still don’t know how much it will be in January and February, at least half of what was in the quarter, they have to give us”. the director of a large food company.
From Commercio they point out that “what is being negotiated are the terms of the new agreement upon expiry of the current one, which is 120 days. Perhaps it will be brought forward by a couple of weeks and The idea is that this trail is 3.2% instead of 4% in the rest of the products that are not frozen.
As for the new Equo Prices basket, there will be another 2,000 products that will be frozen They can be the same or they can change. There will certainly be a rotation: frozen products will come out and go in the price path and some that are in the path will be in the frozen ones. What is not known is the percentage increase that those products that will join the new Pricing Right agreement will have,” the official sources highlighted.
In the same sense, a source from a supermarket pointed out: “companies are being given the opportunity to change the products within Fair Prices, without affecting the quality of the basket,” he said. And he also stated that the discussions that “normally they would be in March, they are moving to implement them as soon as possible”he opined.
In one of the industries with weight in mass consumer products which is in permanent dialogue with officials, they confirmed: “we had a first meeting and the 4X3 scheme was proposed to us”, explained the source, referring to the fact that the government said that planned increases outside the Equitable Prices, they will rise by a general 3.2% through May or June, instead of the 4% as expected now.
The current Fair Pricing program was launched in November and expires at the end of February. But the inflationary pressure used so far by the consultancies is motivating officials to “go ahead” in containing the increases so much so that the February inflation data again show a deceleration, as happened in December when the Consumer Price Index (CPI) rose by 4.9%.
“It has been a very general meeting so far. Now you need to review in detail from when and which products. We await further definitions. For now, everything is very pending”, they relied on another of the main food companies.
On how they took the proposition, companies use the delays they have had due to rising costs. “We don’t have much headroom, with inflation above 4% a month, our production costs are putting a lot of pressure,” another entrepreneur explained. “We’ll see how the talks go, but it’s difficult,” he acknowledged.
Source: Clarin
