The Undersecretary of Consumer Defense and Commercial Loyalty, an area that falls under the Ministry of Economy, plans to conduct new studies on the value chains of some products in the basic basket amidst the rapid rise in inflation. The Undersecretary aims to gather information about the formation of prices of the foods that people consume the most and have increased significantly in the past year.
The value chain is a sequence of activities that adds value to a product or service. The portfolio’s job is to monitor the actions taken by companies during the process of creating and developing their products, which enables them to sell them at a higher price. According to an official source, this analysis helps determine a company’s competitive advantage and is also a useful tool for consumers to understand where the amount charged by merchants for certain products or services comes from.
The Undersecretariat intends to start by analyzing the value chain of essential foods for family consumption, such as oil, rice, and fruits and vegetables. Private organizations have also conducted similar surveys in recent years given that food is an item that has been registering significant increases above general inflation.
A recent report from the Chamber of Medium Enterprises (CAME) found that Agri-food prices multiplied by 3.5 times from field to shelf in December 2023. The report also highlighted how taxes play a significant role in shaping prices, with 25% of the final price of food being made up of taxes according to the Agricultural Foundation for the Development of Argentina (FADA).
The increase in food prices has a significant impact on families’ budgets, especially those with lower incomes who allocate a greater percentage of their income towards purchasing these products. Producers are also affected as they receive only $3.5 for every $1 they produce when sold on shelves during December 2023.
In conclusion, understanding value chains can help both consumers and producers make informed decisions about pricing strategies and product development. By conducting these studies, policymakers hope to create a more transparent marketplace where all parties involved can benefit equally.