After several weeks of negotiation and in the battle to control the rise in food prices, the government moved two important cards in its price control programs: it decided not to extend the resolution that ensured the validity of Maximum Prices, created at the beginning from the pandemic to maintain the values of food and cleaning products; and launched in parallel the Super Close program, an agreement of fixed prices for six months in 70 essential products that will reach nearby shops throughout the country until the end of the year.
“We had yet to find the tool to reach the global retail trade. The neighborhood trade, where more than 60 percent of purchases are made in Argentina”, explained the Minister of Productive Development Matias Kulfas, who presented the program together with the Secretary of Internal Trade, Paula Spanish.
This program complements the well-known Precious Care, a brand installed with more than 660 products, which reaches large supermarkets and wholesalers throughout the country. The total of 70 products that make up the program in this first stage correspond to first and second brands of the 24 most important companies in each industry sector such as Unilever, Danone, Bimbo, Marolio, Arcor, Mondelez, Johnson, Colgate, Nestlé and Quilmes.
Some products, such as Garcia de Danone yogurt, are exclusive releases for this basket. The price of the rest of the products will have an average reduction of 7 percent compared to the data collected in the proximity stores in May. The most notorious example is the one-liter sachet of milk from La Martona, which is currently at 95 pesos in the gondolas of the neighborhood stores of the AMBA and, according to the list published by the government on the official website of Super close, its price will drop to 74 pesos.
Labeled and federal
“A large part of the negotiation with the companies had to do with the need to maintain the same prices throughout the country, despite the fact that logistics costs may be different; and the inclusion of labels to give predictability and transparency to the Program “, assured the Secretary of Commerce.
To ensure compliance with the agreement, Super Cerca products will have a specific label printed on the container with a suggested retail price. Regarding distribution, the companies involved undertake to guarantee that all the products that make up the basket reach the local shops. Around 60 percent of the companies that participate in the agreement have direct or outsourced but exclusive distribution, a particularity that ensures that the products are present in nearby shops, neighborhood stores and Chinese supermarkets throughout the national territory. The rest of the large firms that have contracted wholesale or multi-brand distribution services are responsible for ensuring that Super Cerca’s products reach all stores in the same way.
Super Cerca is made up of 30 warehouse products, 10 dairy products, 2 varieties of bakery products, 5 non-alcoholic beverages, 6 clothing care products, 5 cleaning supplies, 4 types of children’s diapers and 8 various perfumery and care products. personal.
The basket includes categories such as dry noodles, rice, flour, breadcrumbs, empanada and pie tapas, cream and grated cheese, yogurt, milk, dulce de leche, bread, tomato puree and sauce, tea, coffee, yerba mate, water cookies and sweets, jam, sugar, cocoa powder, water, soda, shampoo, laundry and toilet soap, alcohol gel, deodorant, baby diapers, fabric softener, bleach, floor cleaner, toilet paper, repellent , toothpaste and detergent.
“We include 70 items knowing that in a local store they are well represented and to be consumed in one day, from breakfast to dinner. We begin the negotiation to be sure that there is a national arrival and a correct distribution. Other products and brands can be included, but we start from the basis that the size of the participating companies guarantees that the products will be on the shelves ”, reported Español.
When asked about why they did not enter fresh food such as fruits and vegetables or meat products, which are the ones with the highest price increases in the year, the Secretary of Commerce explained that the complexity lies in the characteristics of these products, in which seasonality and external factors such as rains directly influence their prices. “Setting prices on these products is more complex, that’s why we look for other agreements such as meat,” explained Español.
End at Maximum Prices
The plan is launched on the same day that the resolution that extended the Maximum Prices Program expires, one of the most criticized by food and mass consumption companies.
“We implemented it at the beginning of the pandemic in a scenario of strong restrictions and great uncertainty. At the end of last year the delisting began in the successive extensions, and many of these products become part of Super Cerca. With in this context we conclude Maximum Prices“Kulfas explained.
As part of the negotiation with the companies, the government decided not to carry out a new extension of the resolution, although the increases must continue to be established with the Ministry of Internal Trade. The difference is that, in the event that they do not do so, there would be no regulations that could penalize non-compliant companies, except to go back and freeze the prices of mass consumer products again.
In this way, the government will from now on support two baskets of products: one for supermarkets and the other for local businesses, which arise from a concerted negotiation with the companies.