In the midst of the galloping advance of inflation, the undersecretary for Consumer Defense and Commercial Loyalty, an area that depends on the Ministry of Economy, intends to implement new studies on the value chains of some basic basket products.
“We need to have information on this What are the instances in the formation of prices?“In essence, the foods that people consume the most and which have increased a lot in the last year”, confided a senior source of the undersecretary who currently manages Fernando Blanco Muiño. The official was also national director of Consumer Defense during the government of Mauricio Macri.
The value chain is the sequence of activities that add value to a product or service. That is, the task of the wallet will be to monitor the actions that the company takes during the process of creating and developing its products, which allow it to sell them at a higher price. This traceability in price formation can be used analyze the value created by a company and its comparison with other companies in its sector, and also from different sectors.
According to the official source, this analysis helps to determine the competitive advantage of the company. “For consumers it is also a useful tool to understand where the amount that the merchant intends to charge for a certain product or service comes from,” adds the official source.
The idea of the Undersecretariat, now with multiple functions, is to start by analyzing the value chain of the most essential foods for family consumption, such as oil, rice, but also fruit and vegetables. This analysis will be carried out “by product”, commented the official source, even if it has not yet been defined which will be the first articles analyzed.
Surveys of this type have also been conducted in the private sector, given that food is a commodity that records increases higher than general inflation. In 2023, the consumer price index (CPI) increased by 211%, while food and beverages grew by 251.3%.
The increase in food prices has a strong impact on the budget of families, especially those with lower incomes who allocate a greater percentage of their income to the purchase of these products.
According to a recent report from the Chamber of Medium-sized Enterprises (CAME), December 2023 Agri-food prices multiplied 3.5 times from the field (origin) to the shelf (destination). That is, the consumer paid $3.50 for every dollar received from the manufacturer.
On average, according to this analysis, producer participation represented 26.3% of final sales prices. The largest participation was that of strawberry producers (52%), while the smallest was that of red apple producers (11%), according to the results of the latest Index of Prices at Origin and Destination (IPOD) developed by the sector. VENNI.
An ingredient that taxes play into determining prices. According to the Agricultural Foundation for the Development of Argentina (FADA), 25% of the final price of food is made up of taxes. They therefore have a significant impact on production costs and the commercial chain.
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.