To reduce the huge price gap, the government will launch a smaller version of fair prices in the coming days. Faced with plummeting sales in neighborhood businesses, The Ministry of Commerce will launch a basket of around 120 consumer products at regulated prices for local businesses. The office, headed by massist Matías Tombolini, finalizes the details with wholesalers and distributors for make the provision official “in the next few days”.
It is the third time that an attempt has been made to extend the “anti-inflationary” program (like the current Fair Prices) outside the large supermarket chains. They had already tried unsuccessfully in 2020 Paula Español (with Super Close) and in 2021 Roberto Feletti (+ Careful prices), two of Tombolini’s predecessors. Both ventures failed for the same reason: the notorious lack of products.
However, Tombolini is making a new attempt to curb the increase in prices in warehouses, Chinese supermarkets and neighborhood shops, which are much higher than in the big chains. “The difference between the modern channel and the proximity channel increased by an average of 46% in the first week of May“, he confided clarion an official source.
This Tuesday afternoon local wholesalers and entrepreneurs met with the Tombolini team to try to close the definitive agreement. One of the key points is the maximum marketing margin, that is, the obligation to place a ceiling on profits along the entire distribution chain to avoid making the products of the program more expensive.
The government promises to formalize the new Right Prices basket by the end of the month, the old claim of grocers and super Chinese. Until now, “117 basic articles agreed”, but the number could change as negotiations progress. The initiative expresses the enormous official concern about the inflationary escalation of recent months. In April, the cost of living rose by 8.4%, thanks to the increase in seasonal products (12.8%) and in the food and beverage category, which stood at 10.8%. In May the numbers would be worse, as predicted by private consultants.
Since its inception, Precios Justos has focused exclusively on large supermarket chains, which account for 40% of raw material sales (food, drinks, toiletries and cleaning). The program covers a universe of 25,000 products, which today have a maximum rise of 5% per month, divided into two phases: 3.2% in the first week of the month and another 1.8% from the 20th. It is not known if the “proximity trash”, it will have the same pattern. “It’s not closed yet,” official and private sources say.
For now, fair prices (plus promotions) have allowed large supermarket chains to gain market share at the expense of small businesses. Sales in independent and Asian supermarkets fell by 16.6% in April. And in the first week of May, the contraction rose to 21.6%. “The cumulative data for the year leaves us with a contraction of -8.2% in consumption”, underlines a report by the consultancy firm Scanntech.
The survey indicates that all product families lose consumption in the first quarter of the year: food (-15.4%); Personal care (-11.2%); cleanliness (-6.9); and drinks (-3.1). Scanntech also found that sales at small supermarkets across the country fell 10.7% last month and 27.2% in the first week of May. The total of the basket recorded an average increase of 8% and 127% year-on-year.
The price gap between channels is natural. The large chains have other differential tools, such as the possibility of agreeing promotions with the producers and also offering almost all means of payment. As well as focus program Fair Prices. The government insists, once again, on replicating the latter recipe in independent supermarkets, warehouses and local businesses. Something the private sector doubts can be done. “Logistics and distribution costs are not the same. Especially for supplying points of sale far from urban centres”, they underline.
Source: Clarin
