Decisive week in the tug-of-war for the renewal of the Assistance Prices

The Secretary of Commerce, Guillermo Hang, negotiates against the clock the renewal of the assistance prices under two premises: that there are no shortages and that the increases do not exceed 9% in the next quarter. Conversations revolve around reducing the number of products in the cart (today they have 1,321) and the prices they will regulate from next Thursday until October 7thas agreed with the mass consumer industry at the beginning of the year.

“Nothing has been finalized yet, but the meetings are regular,” he confided Clarione a source of food. At the table it is proposed to remove the items deemed non-essential and to consider the higher costs due to the inflationary escalation of recent months. “Initially, increases of 2% per month were authorized and then it moved to 3%. With this, there are products that have delays of 15% and up to 20%“, they describe.

The government’s position is that the next quarterly adjustment be a figure. The Hang team went through the companies’ proposals to create a new basket, smaller and easier to control. A very partial disarmament of the policy promoted by the resigning Roberto Feletti, who doubled the number of products (670) managed by its predecessor in office, Paula Español. “There is no precise number yet, but it will be smaller,” explained an official source.

For now, Hang favors offer over variety. The logic of the official is to increase the presence of the program in supermarket chains in order to establish reference prices. “If that can’t be guaranteed, I’d prefer they get rid of it“, he insists on producers. It is not free will.” A company can take back items (oil, for example) as long as there are other options within the category“, they comment.

Hang plans to close agreements with the companies, in individual negotiations, in the coming days. Two weeks ago, the Secretary of Commerce attended a lunch with the Minister of Economy, Martín Guzmán, and the head of the Central Bank, Miguel Pesce, which was attended by the main suppliers of the Care Prices programyes The meeting was attended by Arcor, Molinos, Unilever, Coca-Cola, La Serenissima, Procter & Gamble and Quilmes. Guzmán referred to the economic context and Pesce, in turn, justified the import barriers and asked “Patience until September”.

The meeting was the prologue to the Care Prices negotiations, which intensified over the past week. Hang is aligned with Guzmán and also under his orbit. Previously, his office depended on the Ministry of Productive Development. From the beginning, the officer ratified all the recipes applied by Feletti (Care prices, proximity baskets and fresh products, and grain and oil funds). All this despite the lack of results.

However, the continuity of the program is not in doubt and this despite the prices not giving respite. Inflation rose to 6.7% in March, the highest level this year, but slowed in the following months. The projections for June do not bode well: two consultants (Eco Go and Equilibra) estimated that the cost of living increased by 5.4%“which shows interannual inflation of 64.1% and an accumulated 36.3% so far this year”.

Therefore, the relevance of service prices is in question. Price containment isn’t Hang’s only concern. There are other distortions that persist and deepen precisely because of the application of controls: the main one is the price gap between supermarkets and local businesses (warehouses, Chinese supermarkets), which expanded with rising inflation.

Another point of discussion is the supply of the products that make up the so-called proximity baskets. There are two of them and they contain 60 basic elements each. And so far, and despite the government’s efforts, they have never worked. In this regard, Hang asked companies to submit proposals to expand the formula throughout the national territory.