Against the clock and to meet trade demands for escalating inflation, the government has entered into negotiations to reformulate fair prices. The goal of the Secretary of Commerce, led by Matías Tombolini, is to close another deal that expect increases of up to 5% per month for the next 90 days for a universe of 25,000 consumer products. Official and commercial sources have confided that this new “price path”, which until now it was 3.2%would go into effect this Friday, although companies doubt that is possible.
This weekend, Tombolini asked companies, including Unilever, CCU Group, Procter & Gamble, Mondelez and some supermarkets, the basis for the continuity of its anti-inflation program. On the one hand he proposed that he was willing to authorize a 3.8% increase in the basket of 2,000 items that have been frozen since February; and two hikes (by 3.2% at the start and a further 1.8% since around 20) for the rest, all to guarantee normal supply until the end of July.
The idea is to counter the jump in inflation recorded in recent weeks, especially in basic necessities. Last month the cost of living rose by 7.7% (the highest change since 2002), but food was one of the elements with the highest average incidence. This set of products amassed a 9.3% increase, according to the latest data released by INDEC. For April, private counseling provides a similar figure.
On the recommendation of the Minister of Economy, Sergio Massa, Tombolini renegotiated fair prices, even if most of the suppliers (129 in all) have not yet been summoned. “The percentages -clarifies an official source- they are not closed yetbut they are talking in that direction”. In that office they underline that they also seek to add wholesalers (to stop increases in warehouses and self-service) and the sector of industrial inputs and suppliers of raw materials, such as packaging. The government also intends to reverse the hikes.
The companies were not entirely clear on the final proposal. “A little bit of everything has been talked about, but it seems to me so the main concern is the price gap between supermarkets and the traditional channel (shops, neighborhood businesses and supermarkets)”, they point out. In this regard, close to Tombolini they ensure that the aspiration is to train, once again, a special basket for local businessessomething that has been tried before (like the Super Close program) and never worked.
Complaints about rising costs in the industry aren’t new. as anticipated clarionlast month, Tombolini authorized increases of up to 6% on approximately 3,000 items. That is, up to 2.8% above the limit established as the “price path”. According to the lists that the supermarkets have received, the exemptions reach basic necessities and that are present in all commercial formats: hypermarkets, super, express and local.
For now, this new round of talks are declarations of principle, because many companies are waiting for the call from Commerce to internalize the conditions proposed by the Government. From a multinational they confided that the panorama is still very confused. “Today what worries us the most are the delays in imports and not so much the prices. We lack inputs to produce and getting an authorization is an ordeal,” he said. It is no trivial matter. The fair price deal, from the outset, capped increases in exchange for facilitating reserve dollars for the purchase of goods abroad .
The other issue is the entry into force of the new programme. The Government is trying to make some concrete announcements, if possible before the weekend. But in the private sector they doubt that this is possible, given that the negotiations have just begun and many rough edges remain to be ironed out. For example, the conformation of the new price lists that the large supermarkets should display on the gondolas.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.