same roadmap and promise of greater effectiveness

Concern

In his first public appearance with Guzmán, Hang said he was “concerned like everyone else” about the increase in the price of food, which in the first quarter rose to 28%, 5 points above the general level. He also anticipated that work will continue on the “same line” The brief statement was made before journalists from Casa Rosada during the launch of the incentive regime for hydrocarbons this Tuesday morning.

As this newspaper learned, the same policies that Feletti had been working on, and that had begun with Español, will continue. The relationship with supermarkets and mass consumption companies will be maintained through the “dialogue”, and although the private sector awaits the call to meet him, there is still no scheduled date for the meeting. At the moment, the private sector has limited itself to “reading his CV” to analyze who will occupy such a hot seat.

The premise of the Secretary of Internal Trade will be that of Guzmán: inflation is “multicausal”, but “price-income” policies such as Care Prices are part of the “comprehensive plan” to achieve “anchoring expectations”. Guzmán had defended the price control before the IMF staff last January, together with Feletti. For May, the Government expects a 5% inflation as floor.

Greater effectiveness

As Ámbito was able to reconstruct, although continuity in policies is expected, they will seek greater “effectiveness”. The Care Prices program had had a significant drop in supply: compliance, which used to be on average 75-80%, had dropped about 10 points, between 65-70%according to an official survey.

In his latest meetings with manufacturers and marketers, Feletti asked for explanations: The question was whether there was a drop in food supply in supermarkets, given that they can sell the same product but at any price in nearby stores. With the same explanation, supermarkets and manufacturers argued that the prices of the program are so lower than the products outside the list that the greater consumer demand generates shortages.

Whatever the explanation for the missing, the truth is that Feletti and Guzmán, in the few hours that they shared the public function, agreed that it was necessary to shorten the price gap, which in some cases exceeds 80%. La Armonía Care Prices milk costs $91 in the supermarket, and the leading brand that is not in the program costs $167, in the same gondola.

The renewal of Care Prices, together with the meat program (Care Cuts) is in July, so the call was going to start in the next few days. The idea that Feletti had was to authorize in June an increase higher than that established for the list of Careful Prices, and that in exchange the companies would open the costs of the products outside the price control and “regulate the profit margins” to shorten this gap. Guzmán agreed with this possible path, unlike the other measures that Feletti called for an effective decoupling of prices. For Feletti, the food crisis “has just begun” and will worsen, due to the protectionist measures taken by the producing countries, as this newspaper learned.

A tool that Guzmán will ask to give a more effective operation is the trust, the only intervention that the Government took in the face of the international price shock caused by the war, over a change in withholdings. Two trusts were established: a private one, where exporters subsidize products with Care Prices; and a public one that manages Internal Trade, where with the rise in withholdings on soybean oil, industrial flour is subsidized to stabilize the price of bread. The latter was announced by the Government in March and was launched last week, with the subsidy to three mills, and another 10 that are in the process. To make this policy more effective, the Ministry of Economy could move forward with the unification of both trusts.