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ECONOMY | 17-02-2021 14:28

Government to investigate food companies amid price clampdown

Production & Development Ministry plans to investigate several food companies for not “increasing production to its highest level of installed capacity” and ensuring proper delivery.

Argentina’s government is investigating several food companies for allegedly withholding production or deliveries, possibly increasing oversight of an industry that already faces widespread price controls.

The Production & Development Ministry plans to investigate Danone SA, Unilever PLC and Procter & Gamble Co, among others, for not “increasing production to its highest level of installed capacity” and ensuring proper delivery, according to a statement published Wednesday. The ministry says its goal is to protect consumers.

The three companies didn't immediately respond to emails requesting comment.

It’s another chapter in the uneasy relationship between businesses and President Alberto Fernández’s administration. His government has implemented widespread price controls, defaulted on private creditors, restricted companies’ access to the foreign exchange market and unsuccessfully attempted to nationalise the bankrupt agricultural giant Vicentin. In January alone, Argentina’s communications regulator demanded that phone and Internet companies roll back price increases, while the government forced supermarkets to lower beef prices after they shot up.

Fernández’s government says the food companies violated a resolution that’s key to its price-freeze programme known in Spanish as 'Precios Máximos,' which is currently extended until the end of March. Officials have also doubled the amount of products in a separate price-control programme that only allows businesses to marginally raise prices, well below inflation.

Other companies, including Walmart and LatAm Airlines have recently ended operations in Argentina amid the anti-business climate. Danone announced in October it’s reviewing its operations in Argentina.

 

 

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by Patrick Gillespie & Ignacio Olivera Doll, Bloomberg

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