This Tuesday, August 15, the Fair Prices program expires, the price agreement launched by the Minister of Economy, Sergio Massa, when he took over as head of the Palacio de Hacienda. Until August, he proposed that all consumer products sold in supermarkets and wholesalers have a monthly increase cap of 5%, while there was a basket of 1,800 essential goods with increases of 3.5%.
The Secretary of Commerce, Matias Tombolini, he anticipated to the companies in a meeting on Friday of last week that the intention was to extend it. However, they did not define the list of products, the term and, most importantly, the pattern of monthly increases. The discussion could take place this Wednesday in a series of meetings at the headquarters of the former Ministry of Industry, on Roca street.
A climate of tension is expected. “Fair Prices is voluntary, but the renewal is confirmed,” said an official source. Although the monthly increase pattern is not defined, in the Ministry of Economy they assure that companies have “margin not to raise prices”. In fact, at the Economic Policy Secretariat, led by Gabriel Rubinstein, they produced a report on “rising gross business margins.” In addition, Massa defined that the negotiations will go ahead the customs officer, William Michelseconded by Rubinstein and by the head of the AFIP, Carlos Castagneto.
However, the food will meet with another position. After several weeks without meeting, this Monday afternoon there was a meeting of the chamber that brings together the food industry (COPAL), chaired by Daniel Funes de Rioja. One of those present, who preferred not to be mentioned, commented: “The Ministry of Commerce is preparing the ground to once again strongly condition us with prices. A note will be presented to Tombolini and Massa to explain how the costs varied as a result of the country tax on imports and the devaluation 22% in one day”.
“Everyone agreed that once and for all things must be assumed to be truly worth, based on their real manufacturing costs, without more patches,” commented from a food industry. Regarding the impact on the cost structure, different sources commented that it varies depending on the product, but that it gives a floor of increases of 9 and up to 15% only for August, so it could be the pattern of monthly increase to ask.
The situation seems so tense that some companies were circulating the question of whether they were going to adhere to the price agreement, since it is a voluntary program. “Prices were already 5% behind, so this guideline will be impossible to follow because costs automatically skyrocketed with the devaluation,” they commented from another industry. from another companyThey added: “It was unexpected that they devalue nowto accompany you will have to see the conditions, companies always accompany, but with this new scenario the 5% monthly is unfeasible”.
Discounts to companies: the “carrot” that the Government will use
According to official sources, the “carrot” that they will take this time to join the agreement will be to apply tax discounts to companies that enter the program, and a letter from the Central Bank to guarantee import operations in their production chains.
Although the price agreement expires this Tuesday and continuity has not yet been defined, in some supermarkets consulted by Ambit They commented that the prices will be maintained until the renewal occurs. However, they also said that they tried to make new orders to the food companies, and that there were companies that did not take new orders, waiting for how the new lists will be. “We expect a pattern of monthly increases that is somewhere in the middle of 22% devaluation,” a supplier commented.
In fact, the Secretary of Commerce requested that new lists not yet be passed. But some executives wonder how long the stock will last. In addition, they wonder about the strength of the Government in the negotiation: “Last week they had a back that today, when third parties leave, they do not have,” they commented in a food.
The renewal of Fair Prices will be for food, drinks, cleaning products and personal hygiene. However, there were also price guidelines agreed with companies for household appliances, footwear, appliances and cell phones that also expire. At the moment, there is no proposal to move forward.
Source: Ambito
