Fair prices: doubts and confusion with the convention, the price lists and the price gap

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Five days after its announcement, the expanded version of Fair Prices still has no defined outlines and its implementation is still in the shadows. Companies and commercial chains say so they have not signed any agreements and that there are only partial agreements on the price lists of the products that will integrate the program, which establishes a ceiling of 3.2% on monthly increases. The Government itself acknowledges that the basket of 2,000 basic necessities that will be frozen until June has not even been defined. “It will spread over the next few days,” they promise.

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This Friday and in front of an audience of managers, supermarkets, trade unionists and some mayors, the Minister of the Economy, Sergio Massa, and the Secretary of Commerce, Matías Tombolini, announced at the CCK the renewal of Fair prices, scheduled for the end of February. They invoked the need to fight inflation by establishing “a price track” at 49,832 items of over 15 items (mass consumption, textiles, footwear, mobile phones, electronics, laboratories and even private schools, among others) in agreement with 482 companies. All in exchange for the delivery of “cheap” dollars to import.

The announcement was so accurate but still caused some confusion. Manufacturers and chains disagree on the entry into force and scope of the program. For some, and despite the fact that nothing has been signed, Fair Prices is already in place. “There was already a guideline for maximum increases of 4%, now reduced to 3.2%. All that remains is to confirm the new fixed price basket,” reasons a source from a mass product supplier. From one chain it wasn’t clear if they had adhered to small appliances. And what were they?

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In the private sector there are two camps. Some believe that the situation will clear up in the coming days, while others are baffled. Reformatted countless times, regulated locks and recycle bins haven’t worked so far. At least to curb inflation. What happens, as some specialized consulting firms warn, is this the shortage of products worsens in supermarkets (it is said that the level of compliance with fair prices is on average 45%) e also the price dispersion between channels.

The gap between supermarkets, shops and self-services is not new, but has now grown due to two factors: acceleration of inflation and tightening of controls. A Nielsen survey of 7 commodities is revealing. The difference in a 900 ml Fair Price sunflower oil (found only in large supermarkets) is 95% with self-service and 108% with shops.

The same happens with soap powder (89% more expensive in shops and 64% in self-service shops), canned lager x 354cc (79% and 84%, respectively), 1.5 liter diet soda ( 24% and 25%), light cream cheese x 290 gr (35% and 30%), sweet chocolate biscuits x 100 gr (56% and 46%) and snack chips x 80 gr (62% more expensive both in shops than in self-service). This issue is troubling for two reasons. Firstly because the large chains concentrate 31% of the sales of large-scale consumption (food, beverages, bathroom and cleaning products).

The other factor is that Local stores and shops “are the formats where people with lower incomes buy”, explains Javier González, analyst at Nielsen. The difference in price, therefore, involuntarily penalizes the informal sectors, who carry out their daily shopping (on average two to three items) in nearby businesses and shops. The same consultant points out that consumption in large chains and shops was maintained in 2022, but it fell very hard in independent and Chinese supermarkets.

Despite efforts, controls and intense negotiations to establish reference prices, inflation does not stop. In January, the cost of living rose to 7.3% in the Capital, the highest level since July 2022. In the GBA, according to Ecolatina, prices increased by an average of 6.4%. Next week, INDEC will publish nationwide data, which according to consultants would give between 5.5% and 6%, in contrast to Massa’s own forecast (less than 4% in April) and the model of 60% for the entire year established by the Budget Law.

Source: Clarin

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