The Ministry of Economy’s Undersecretary for Consumer Protection and Commercial Loyalty has announced plans to conduct new studies on the value chains of some products in the core basket amidst galloping inflation. The undersecretary aims to collect information about the formation of the prices of the foods that people consume the most and which have increased significantly in the last year.
A value chain is a series of activities that add value to a product or service, and this analysis will help determine a company’s competitive advantage. It also serves as a useful tool for consumers to understand where the amount a merchant intends to charge for a particular product or service comes from.
The Sub-Secretariat will start by analyzing the value chain of staple foods for family consumption, such as oil, rice and fruits and vegetables. This type of research was also carried out from the private sphere, given that food is an item that records an increase above general inflation.
According to a recent report by the Chamber of Medium-sized Enterprises (CAME), in December 2023, prices of agri-food products multiplied 3.5 times from field to shelf. The report also highlighted the impact of taxes on price formation, with 25% of the final price of food being taxes according to the Agricultural Development Foundation of Argentina (FADA).
The increase in food prices has a strong impact on families’ budgets, especially those with lower incomes who allocate more money towards purchasing these products. Manufacturers are also affected as they receive less payment than what they produce due to high consumer demand.