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ECONOMY | 15-02-2023 00:07

'Like James Bond' – Argentina’s price spies fan out to fight inflation

A group of ordinary citizens are volunteering their time to police stores' adherence to price controls proposed by the government to curtail spiralling inflation.

Like a veritable undercover agent, Mónica Schenone tries to pass unnoticed through the aisles of a supermarket in Buenos Aires, sneaking photographs of price tags.

The 52-year-old homemaker is part of a group of ordinary Argentines who volunteer their time to police stores' adherence to price limits suggested by the government to curtail spiralling inflation.

She feels "like James Bond," Schenone says, as she tries to blend in with shoppers in the capital of Argentina – which in 2022 recorded its highest inflation rate in three decades at 94.8 percent, one of the highest in the world.

Prices for daily staples rose monthly, even weekly in 2022, with milk prices climbing more than four-fold and those for cooking oil and sugar more than five-fold, according to the Abeceb economic consultancy.

In a bid to rein in galloping price rises, the government's ‘Precios Justos’ (“Fair Prices”) programme applies a 3.2-percent monthly price hike limit to some 2,000 essential products including flour, rice, milk and sunflower oil.

"I am in shock," Schenone said as she exited a supermarket in the San Cristóbal neighbourhood where she had executed a covert price check she said left her horrified.

"A bar of soap that went from 231.40 pesos to 496 pesos, that does not seem to me to be a three percent increase," she said. "It seems to me that we are still being taken for fools."

Precios Justos runs from February to the end of June, and covers food and medicines but also soap, clothing, shoes, and school gear, among other items. 

Joining is voluntary, but producers and vendors who do sign up to the price agreement risk fines for non-compliance of up to 71 million pesos (some US$370,000 at Tuesday's exchange rate) from the authorities.

Precios Justos, states the government, "aims to reduce inflationary expectations and... recover the purchasing power of the population’s income."

All major supermarket chains as well as Argentina's massive COPAL food and drinks producers' group have signed up to the programme.

But most smaller, independent stores which serve millions of Argentines remain outside the framework, sometimes charging prices double the suggested rate, according to consulting firm Nielsen IQ.

 

'Impotence'

Schenone and about two dozen others members of an activist group called 'Movimiento a la Dignidad" (“Movement for Dignity”) have taken it upon themselves to check up on Precios Justos compliance in Buenos Aires. 

She said they regularly observe serious breaches. Most often, price-controlled products are simply not stocked, but there are also many cases of prices above the agreed limit, she said.

"What I feel is a lot of impotence, a lot of anger. I feel that, as always, those of us in the lower classes continue to be screwed," said Schenone.

The price checker and her peers submit their findings to La Dignidad, which publishes periodic reports.There is also a government-sponsored app for consumers to report violations.

But opponents of the government's plan question the efficacy of price freezes, calling instead for macroeconomic measures such as slashing money printing and public spending.

Argentina has been grappling with an economic crisis for years, registering double-digit inflation in each of the last 12 years.

The causes are multiple, including persistent deficit spending, constant currency devaluation, successive droughts and external factors like the war in Ukraine that affected energy and grain prices.

For the month of January, inflation came in at six percent from December, and at 98.8 percent compared to the same month a year ago, according to data released Tuesday by the INDEC national statistics bureau.

For food and non-alcoholic drinks, prices rose 6.8 percent from December to January, and by 98.4 percent from a year earlier.

 

"A façade"

Despite the announcement of new 'fair prices,' rises in many everyday products have not stopped.

Mónica noted that a kilo of yerba mate went from 707 pesos to 770 pesos, a 10 percent increase.

"Why does a family have to make do with class Z milk because it is cheaper and premium milk costs twice as much?

"This is all a façade. And I take part in the controls to prove it. You can't have a fair price for a litre of milk at 215 pesos [US$1.10 at the official exchange rate]. What do I give a child, then, mate? And the calcium he needs?" she said.

La Dignidad defines itself as a "social left" group focused on low-cost food production. Its leader, Rafael Klejzer, considers that "for an emergency, it is fine to impose price controls, or to make an agreement as a transition," but he questions "that this transition is towards the concentration of companies and, furthermore, we are going without a plan."

Ramiro Castiñeira, of the Econométrica consultancy firm, also questions the price-controls scheme.

"Argentina is a country of governments looking for ideas among the rubble of the Berlin Wall. Inflation is always a product of the state, not of large groups nor of small businesses," he said.

Economy Minister Sergio Massa has said inflation is the "biggest poverty factor" in Argentina.

"Inflation is the worst poison in the economy: it means loss of the value of the currency, of wages, of assets and of wealth, and it means there are no rules," he said recently.

Mónica, meanwhile, vows to continue the battle. "It's a fight for everyone, to make things fair," she explained.

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by Eduardo De Miguel, AFP

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