“The exit from the freeze should be a broad basket administered and related to income policy,” said Feletti, announcing to businessmen how he intends to conclude the period of prices established by resolution.
The supermarkets specified: “The officials also reported that suppliers will be asked to contribute their costs and factory outlet prices.” At least, in this sector the order looks to be expected, since according to complaints, there are many cases in which the prices established by the Secretariat are lower than the value at which they receive when they unload the trucks at their premises.
In the coming days, mass consumption providers will be summoned to the Secretariat to see the new payrolls. Two baskets will be implemented, one with more than 1,000 products but less than the current 1,432 and another with about 200 products within the framework of the relaunch of the Super Cerca program, aiming at the development of regional producers and SMEs.
From the business sector it is argued that the request of the Ministry of Internal Trade may have little margin of compliance, because the industries will legally excuse themselves from complying with such requirements, protected by the right for their competitors to have their own information. If it comes to fruition, it will be out of “good will” they say.
Underlying the idea of asking for information on costs, the hypothesis that pricing has to do with the expenses incurred by the company to produce, to which is added profitability. Another part of the economists’ script indicates that prices are set primarily at the market level, without costs having a determining relationship.
As explained by Hernán Letcher, director of the Center for Argentine Political Economy (CEPA), who at some point sounded like a candidate for the position that Feletti occupies today, “since 2014 there has been a Prices and Costs Observatory created by a law that at the time promoted the then Minister Axel Kicillof ”. “Freezing cannot be maintained, but it is necessary to know what happens inside a chain,” he said. For the observatory to start up, it would require a call from the Ministry of Economy, or Production, although the task it would have to carry out is so great that it could not produce information in the short term.
Supermarkets, for their part, try to stay out of the official gaze, based on the fact that they do not see themselves as price makers. In Argentina, according to private data, the profitability margin of the retail activity is 1%, which is below the world average, of the order of 3%. That is to say, that for the supermarket the business is the high rotation of the products to achieve profitability, not because of the rise in prices.
As indicated by the supermarkets in a statement, “Feletti was satisfied with the results obtained so far” due to the freeze and announced that “in the month of December the completion of the system will begin to be implemented, which will take effect on January 7 , as established in the Resolution ”.
The exit will be through a basket agreed with the different sectors, something that had been happening with the Care Prices Program, which for the industry is somewhat more digestible depending on the fact that they have a margin of negotiation. The prices administered in supermarkets represent between 8% and 14% of the products that appear on the shelves approximately, according to data from private consultants and that marks the difference with the so-called super-Chinese and other neighborhood businesses, where this type of programs are not met. This causes that globally, the “inflation of supermarkets” is lower than that of supermarkets.
A businessman consulted by Ámbito Financiero stated that Feletti’s decision is logical because, in his opinion, the official “wants to know everything.” “When Guillermo Moreno was Secretary of Commerce, he knew by heart the cost structure of all industries,” he graphed.
Source From: Ambito
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