Price control agreements signed by Argentina's former economy minister Sergio Massa with suppliers of food and other goods are terminated and the prices of some products at some supermarkets and shops are already increasing by up to 50 percent.
Sources in the industry reveal that things are “out of control.” Last week products were hiked massively, even ahead of Tuesday's devaluation of the peso.
“There’s no control, it’s over. A price stampede is coming between 15 and 20 percent,” stated one supermarket chain executive.
The president of the FABA Buenos Aires Province Federation of Grocers, Fernando Savore, in turn, points out that up to last weekend hikes of between 30 and 40 percent had already been registered.
“On Tuesday November 21, we started restocking on goods, and they have risen between 25 and 30 percent. Sugar was 900 pesos, now it’s 1,100 pesos, a 32-percent increase. Over the last week, it has climbed to 1,350 pesos,” said the supermarket employee.
In parallel, Savore warned about shortages due to economic uncertainty.
“Wholesalers have no oil. Before the PASO primaries, sunflower oil was 550 pesos and today it’s above 1,500 pesos. It’s impossible to sell. At today’s prices, people’s pockets won’t be able to cope,” he cautioned.
Following that line, Savore also forecast the discontinuation of certain items with above-average mark-ups which if unsold, expire and bring a loss to corner shops.
Local neighbourhood supermarkets (those that aren't chains, locally called 'chinos') are no exception to the rule. Representatives from the sector revealed to this medium that price updates have varied within a range between 12 and 25 percent over the last few days.
"There are no goods for various products. They’re being stocked, awaiting the new government’s economic measures,” pointed out a representative in relation to the caution prevailing among many wholesalers and suppliers.
Price controls
Amid the arrival of Javier Milei and his team in the national government, many firms still do not have an official spokesperson to consult and implemented adjustments which seek to offset the delay have been incurred by agreeing on a ceiling under the inflation over the last few months under Precios Justos (Fair Prices) price-control scheme.
In late October, Alberto Fernández’s administration extended the programme up to December 31 and, thus, intended to freeze the values of 52,300 mass consumer products. Prior to that, authorised updates were five percent per month.
However, the new president revealed that he would free prices to correct delays and distortions and even announced the closedown of the Trade Secretariat, in charge of discussing the value of products on shelves with companies up to December 10.
Alerted by the libertarian’s discourse, thousands of citizens flocked to wholesale and retail supermarkets to stock up before the presidential inauguration. Indeed, there were long queues in the Buenos Aires Metropolitan Area and elsewhere in the country.
Meat soars
At the same time, meat rose by 20 percent the first week of December and rose by a further 15 percent at the Cañuelas cattle market. Thus, so far this month prices havejumped by 35 percent.
The price per kilo on the hoof is now 1,500 pesos, which entails that half a carcass is 3,000 pesos and cuts have escalated to up to 6,000 pesos per kilo on average. According to sources from the sector, the increase will begin to affect butchers within 48 hours.
On this subject, former president of the Argentine Farming Federation, Eduardo Buzzi, had revealed days ago that “if they let it flow, we’re heading for meat at 20,000 or 25,000 pesos per kilo,” clearly rejecting the policies of La Libertad Avanza.
“They’re international values in dollars or euros. That’s what a kilo of meat is worth on the counter in European countries, and it’s what it would be worth if we want to compare ourselves with Chinese demand. Some cuts are already worth 5,000 or 6,000 pesos. Let’s imagine if that doubles or trebles,” Buzzi stated on the radio.
Tracking the hikes
The LCG consultancy firm measured a 7.4-percent inflation of food and beverages in the first week of December, which translates into a 4.1-percent jump from the previous seven days.
Dairy products and eggs topped the rankings of increases with a 20-percent rise, followed by Household beverages and infusions (8.7 percent), Condiments and other food products (6.9 percent) and Meats (6.4 percent).
“The average inflation continued to accelerate, reaching 12.3 percent, +1.8 points compared to the previous week. The point-to-point measurement accelerated over the next few weeks (17.5 percent),” the report stressed.
Between January and October this year, food and beverages had a 134.2-percent rise, above the overall 120 percent rate and were the category which grew the most in 2023. Compared to the same month in 2022, it increased by 153.8 percent.
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