Government expands price agreement program to small stores

The Neighbourhood Fair Prices system makes 108 products available at lower prices in local stores

The Trade Secretariat yesterday expanded the Precios Justos (Fair Prices) price agreement program to small grocery stores as part of efforts to control soaring inflation, which reached 8.4% in April, the highest in over 20 years.

The program, which launched in November and was updated in February, establishes a 3.8% monthly cap on price increases for some goods and freezes the value of 2,000 products. However, these were only available in chain supermarkets until yesterday, while Argentines do most of their shopping in other kinds of store. 

“More than 60% of the consumption of our compatriots takes place” in smaller grocery stores, Trade Secretary Matías Tombolini acknowledged.

The new chapter of the program, Precios Justos Barriales (Neighbourhood Fair Prices), seeks to partially address the issue by adding 108 products to grocery stores with a 3.8% maximum monthly increase.

They include personal hygiene and cleaning products, as well as basic foods such as noodles, dairy products, sugar, and cooking oil.

Tombolini said in an interview with radio AM750 today that the goal of the program was to allow smaller stores to compete with supermarkets on price, a decision which came after the Secretariat found out that there was “a 20% drop in grocery store sales in the [Buenos Aires] Metropolitan Area”.

The agreement was made with eight wholesalers (Maxiconsumo, Diarco, Yaguar, Vital, Parodi, Makro, Micropack, and Nini), which supply grocery stores. However, according to an Economy Ministry source, representatives of grocery stores were not invited to participate and it is up to store owners to inform themselves about how it works on the official website.

Prices “lower than reality”

“We were not called,” Vanesa Ruiz, vice president of the Grocers’ Center in Córdoba, told the Herald. “We found out about the program through media outlets.”

According to Ruiz, the lack of dialogue between grocers’ chambers and the government will make it harder to implement the program. Moreover, they have already detected some inconsistencies.

“The listed prices are a lot lower than the current reality,” Ruiz said. “For example, [in the new official list] there is a vegetable oil listed at AR$331, while our retailers are buying it at AR$650. We will be watching out for the availability of the products in the necessary quantities to supply for the grocery stores.”

Ruiz said that her organization and its counterparts in other provinces are “skeptical” about the enforceability of the program.

“Manufacturers commit to participating in the beginning but, as time passes, they start to drop products – they change the packaging, the weight, or they add additives… this way, the product’s code changes.”

A month ago, the Trade Secretariat fined multinational companies Coca-Cola and Danone for selling products with monthly price increases up to 10 times over the limit established by the Precios Justos agreement.

A source at one of the companies who asked to remain anonymous, said that it “adjusts” prices for stores not in the price program because their monthly costs rise by more than they can increase supermarket prices. 


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