The axes of the government’s plan against inflation: controls, agreements, sanctions and compensation

After soaring prices in recent months, the government is moving forward with a plan to try to curb inflation, based on four axis: control and penalties to supermarkets and companies in the food industry; price agreements with the launch of a new basket for local businesses and an agreement with the Central Market that, alongside the creation of a compensation fundwill seek to offer fresh products at a lower value.

The person in charge of sketch the plan is the Secretary of Internal Commerce, Roberto Felettiwho will announce over the next few days the various programs, plans, agreements and measures that will be put in place.

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“In a global scenario marked by a sharp rise in the price of foodstuffs, and in particular wheat, there is no room for speculative attacks that endanger the table of our people. For this reason, from the government, we have implemented a series of tools,” Feletti wrote on his social media account Twitter.

On his Twitter social network account, Roberto Feletti warned that he would not authorize “speculative maneuvers”. (Photo: Twitter capture/@RobertoFeletti)

As in the press conference he gave shortly before, the official said that it cannot be “accepted that the interests of a few affect Argentines’ access to food”. “Is about speculative maneuvers that we will not allow“, he advanced in preview of the sanctions which are in the pipes.

Controls and sanctions at supermarkets

One of the axes of the anti-inflationary plan lies in the supermarkets. In addition to canceling some 580 products to the prices valid from March 10the objective is to detect what internal trade considers unjustified increases.

In government, they believe that when President Alberto Fernández announced more than 48 hours in advance the start of a “inflation war” many supermarkets, distributors, traders and manufacturers They raised the prices to “cut” in time for the threat of a price freeze.

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Roberto Feletti is responsible for setting internal trade policies against inflation (Photo: Internal Trade Secretariat).
Roberto Feletti is responsible for setting internal trade policies against inflation (Photo: Internal Trade Secretariat).

In part, this increase – which, according to the Minister of Productive Development, Matias Kufas, in some cases exceeded 20% – is the one that should be corrected with the reverse gear commanded by internal trade. To corroborate that this is actually happening, the government has the ace of the lSupply Act and its penalties.

Controls and sanctions to the food industry

In addition to checks in supermarkets, the government seeks to detect at which link in the chain the largest increases are occurring. For this reason, another axis of the plane is that of the ifood industry.

This Wednesday, Feletti targeted a series of large companies that recorded breaches of up to 100% programmed prices, with an average increase which, in some cases, has reached up to 18 percent.

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To reduce this increase, the official plan is carry out checksbut not only of pricesbut also in supply. believe that some missing stock in the gondolas put pressure on the value of food.

One of the axes of the anti-inflationary plan concerns a basket of regulated prices in local shops (Photo: Marcelo Capece/NA).
One of the axes of the anti-inflationary plan concerns a basket of regulated prices in local shops (Photo: Marcelo Capece/NA).

For this reason, also in this case, the measures include the threat of supply law enforcement. It is estimated that in the next few hours they could respect the penalties for at least some of the companies mentioned by the Secretary of Internal Commerce.

Price agreements with nearby businesses

Until now, price agreements have focused on large supermarkets, but now convenience stores or convenience stores.

This Wednesday, a price list for care was announced, consisting of 60 products which will be sold in local shops which will come into force on April 7.

I also read: Food industry warns of high uncertainty and stands out from rising prices

the compliance monitoring Due to the large number of businesses and warehouses in the neighborhood, it is more complex for domestic trade, but in this portfolio, they believe that it will not be necessary, because it is a smaller basket .

The axes of the government's plan against inflation: controls, agreements, sanctions and compensation

Already in the reissue of Care Prices, mayors, unions and civil servants took to the streets to control the execution of the agreements and this could be an alternative to check that the prices do not exceed the provisions of the basket.

Compensation fund for fresh products

In February, the food Pink 7.5%, accumulate a 12.8% increase in the first two months of the year. Lettuce, round tomato, onion, lemon, chicken eggs, orange, potato, whole milk powder, minced meat and apple made up the 10 best products whose price has risen the most.

The question is on the table. Fresh products in mind and they are essential for the Argentine table. For this reason, in domestic trade, they work, on the one hand, with the Central Market offer a discounted basket.

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But also, it completes the delimitation of a compensation fund -in the style of that announced for wheat and sunflower- which makes it possible to control prices on the internal market, away from international fluctuations.

At this time, it has not been confirmed whether the money from this fund will also come out of the increase deductions with soy derivatives or another mechanism will be created. The announcement on forms, scope and its implications is expected in the coming days.

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James V. Hayes