The government will launch the second stage of the Precios Justos (Fair Prices) price control agreement today, which will allow companies to mark up prices by 3.2% a month.
The original program, officially launched by the Economy Ministry on November 11, froze the value of roughly 2000 products and set a maximum monthly price rise of 4% for 30,000 other items until February 28.
The new stage will maintain the price freeze on those 2000 products –a list that can, and probably will, be modified. The list of items whose price rises are controlled will be expanded to 52,000 products, and the allowable monthly price rise will be reduced from 4% to 3.2%.
The new deal will include consumer goods such as food, cleaning and hygiene products, clothes, cell phones and appliances. According to official sources, 482 companies have joined Fair Prices, and 50 more could do so today.
The Economy Ministry will launch the new Precios Justos with an event in the Kirchner Cultural Center (CCK), attended by Minister Sergio Massa and Trade Secretary Matías Tombolini. Mayors, unions, consumer associations and business chambers are expected to go, as well as representatives of companies that subscribed to the deal such as Unilever, Honda, Adidas, and Coca-Cola, among others.
Like the previous stage, companies’ adherence to the program is voluntary, but the government will facilitate access to US dollars at the official rate for imports for participants. The government will remove the benefit for companies that surpass the 3.2% monthly markup limit.
The government feels the new monthly price markup is consistent with the fiscal deficit, international reserve accumulation and monetary emission goals dictated by the International Monetary Fund (IMF)’s Extended Fund Facility agreement reached with Argentina. These broader macroeconomic guidelines, and not Precios Justos itself, are what will allow the slow and steady descent of the inflation rate, official sources told the Herald.
The price monitoring, which generated controversy two weeks ago after the government agreed on the participation of the Camioneros truckers’ union, will be split in two: physical auditing in supermarkets and monitoring of websites. The virtual side included the development of new software, together with ARSAT and Amazon.
According to official sources, no major supply issues were encountered and compliance levels surpass 80%. The sources told the Herald that the Trade Secretariat issued some 320 infraction reports and that it will most likely fine the companies that did not comply with the agreement.