Argentina’s 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 (Fair Prices) agreement.
Danone was fined AR$45 million (US$205,397 at the official rate, US$103,199 at the MEP rate) while Coca-Cola was fined AR$40 million (US$205,397 at the official rate, US$91,732 at the MEP rate).
Precios Justos is a price-control agreement between the government and companies across 15 economic sectors, freezing the prices of thousands of products to mitigate the runaway effects of inflation. Its current iteration, which was announced in February, established a 3.2% monthly cap on price increases until June 2023.
In a press release, the Trade Secretariat said that the fined companies raised prices by up to 32.8%.
However, the agreement is only applied in supermarkets and not smaller grocery stores. The Trade Secretariat said that it found, during price monitoring operations in grocery stores, that the suppliers were charging their products with markups well above the cap.
Trade Secretary Matías Tombolini remarked on this trend two weeks ago following the announcement of March’s 7.7% inflation figure, saying that grocery stores are where “more than 60% of the consumption of our compatriots takes place.”
One of the companies told the Herald that it was not notified of the fine.
The other one said it was notified and that, while its markups are not as high as the government says, it “adjusts” its values when supplying to grocery stores since their costs increase by more than 3.2% monthly.
Vanesa Ruiz, vice president of the Grocers’ Center in Córdoba, told the Herald that grocery stores were never invited to participate in Precios Justos.
“We cannot supply ourselves with goods at regulated prices. Thus, it is definitely impossible to comply with a pact of which we are not part.”
Companies’ adherence to Precios Justos is voluntary, but the government announced it would facilitate access to US dollars at the official rate for imports for those who take part. The government also said it would remove the benefit for companies that surpass the monthly markup limit.
According to the Trade Secretariat’s press release, since August it has fined companies some AR$ 3 billion (US$13.97 million at the official rate, US$ 7 million at the MEP rate).The government also announced it is investigating companies such as Pepsico, Mastellone, Arcor, Quilmes, Molinos Río de La Plata, and Aguas de Origen for not complying with Precios Justos.