Miley and the world’s craziest free market Sales decline, activity declines, but prices continue to rise
One effect is data that shows better than any academic technicality what is happening with prices and activity in Argentina today. A CEO running supermarkets across the country said Page I12 Since Javier Miley took over the presidency and issued what is called a “limit sale”, prices have fallen by 30 points. Translated: Foreigner That a month ago they had crossed to buy oil, flour, food and even fuel in stores located in the area bordering Paraguay, Bolivia, Brazil and Uruguay, They shopped again in their country of origin, where prices were – until recently – widely higher than in Argentina. Furthermore, this had the effect that the region’s supermarkets lost much of their growing sales, as internal demand also fell.
The example, in color, is one of many that shows that President’s ideological confusion In a nation of free and self-regulated markets and a recession resulting in lower prices, not only is this not happening, but it is occurring in the following scenario: Historic decline in sales With supplier companies who send two lists of weekly increases and who sell, businesses have said, Products are up to 40 percent more expensive than foreign countries,
In contrast to what happened under the previous government’s management, the latter has seen Multinational companies, which continue to be exposed While the Nationals softened. What is noteworthy is that many CEOs who have met with officials in recent weeks and even with the Economy Minister, Luis Caputo, are surprised when the government itself does not impose the slightest limit on growth at any time. Puts it.
record low levels
Sources in non-food, durable goods and manufacturing industries expect sales to decline at least this month 60 percent, Much of this will be caused by the collapse of traditional industry and, above all, the collapse of manufacturing activity. Construction, which supplies industrial inputs. With the closure of public works by the national government, there has been not only a decline in the sector since December, but also monthly layoffs of personnel.
A few days ago, at a meeting of the Argentine Chamber of Construction, Mexican Coppell, which sells electronics, clothing and other goods, said its sales in electronics fell 55 percent in December. And January is coming bad, A national giant in electro sales did the same. In the same meeting, Many people announced that layoffs were coming And many have already decided, as is customary in companies, when Miley warned in 2023 that what is to come is a process of stagflation. That scenario would be favorable given today, current and future data. Companies who spoke to this newspaper acknowledged that in any case, March will see the worst.
in this context, The most worrying data is based on basic consumption, food, beverages and basic needs., This newspaper obtained data from all the major supermarkets for the first two weeks of January. If you look at the sales volume per week, in the first they dropped by 19 percent in units, and in the second they dropped by about 6 points. Till today, Supers saw an average decline of 15 percent, And this happens throughout the country: the same figures show that in January sales in CABA fell by 12 percent, in NOA by 16 percent, in Córdoba and the Core region by 12 percent, while in Cuyo the decline was already up to 14 points. Is coming. In the South Coast, Corrientes and Entre Ríos regions, there is an 8 point decline in sales in units; While in the North the decline is higher, 16 points.
If you look at it by item, meanwhile, electronics sales in supermarkets are down 40 percent year-on-year so far in January, in warehouse the decline is 12 percent, in fresh produce it’s 10 percent, There has been a decline of 14 percent in textiles. ,
And they keep selling expensive
A senior paper leader of the Union of Industrialists (UIA), a unit which drafted the Miley Labor Reforms through its lawyers, and which expresses its full support, told a colleague a few days ago that Dow Chemical sells polyethylene to all industries in the country for $3, a product it offers abroad for $1.9., Dow is the one that produces almost all the polyethylene and its input explains a good part of other final prices, such as food and cleaning containers. A fact: 80 percent of the end value of a bottle of bleach is plastic packaging, made from stuff Dow sells.
When they found out in the government, a fact that is not new, someone in the Commerce Secretary headed by Pablo Lavigne proposed opening imports for them. But the problem is that the dollars are not there and the government does not aim to negotiate any kind of price with the companies.
The state’s abandonment of the price fight – after all, the abandonment of the distribution bid – is an order from Miley to its executives. That’s why no one reacts to what is happening: since he took over and until yesterday, Coca Cola, Nestle and Unilever are sending lists with an increase of 10 to 20 percent every month, and some per week.
toothpaste at 9,000 pesos
The data that most caught the attention of supermarkets in recent days was the growth in Colgate. They also sent a price list along with it toothpaste at 9000 pesos, Interestingly, many supermarkets did the simple exercise of comparing the price of the same products in supermarkets abroad, and the same toothpaste costs one dollar and ninety cents. The same applies to almost everything sold, which is 10 to 40 percent more expensive in Argentina than in any high-end market in Europe.
on the other corner, It is worth saying that the national Molinaos and Mastelones are controlling far more growth than the multinationals.Those who were earlier afraid of dollar administration from government imports and today became free.
The scenario that Miley dreamed up does not occur and, in parallel, what the companies hoped for also does not occur., His idea was that, faced with declining sales, manufacturers would begin to do what is called in commercial jargon “investing in prices”. In short, let the promotion come back with a bang for the second units, with a higher regular price on the first unit and then a lower price on the second. When this happened, consumers accepted the discount and paid, but in contrast, companies continued to grow without taking the discount.
,Big manufacturers are going to produce less, but they’re not going to lose their profitability“What the President wants to see is not being seen. But this is what happens in reality,” a sector manager told this newspaper.