The Undersecretary of Consumer Defense and Commercial Loyalty, who falls under the purview of the Ministry of Economy, has announced plans to conduct new research on the value chains of certain products in the basic basket as inflation continues to rise at an alarming rate. The aim is to gather information about the factors that contribute to the formation of prices for the most consumed foods, which have seen significant increases over the past year.
The value chain refers to the sequence of activities involved in creating and developing a product or service, which adds value and allows it to be sold at a higher price. By analyzing this process, the portfolio hopes to determine a company’s competitive advantage and provide consumers with valuable insight into where prices come from.
The Undersecretariat will begin by examining the value chain of essential foods for family consumption, such as oil, rice, and fruits and vegetables. These are items that have been registering above-average inflation rates in recent years. According to a report by CAME in December 2023, agri-food prices increased by 3.5 times between production and retail levels. Furthermore, taxes accounted for 25% of the final price of food according to FADA.
These increases in food prices have had a significant impact on families’ budgets, particularly those with lower incomes who allocate a larger percentage of their income towards purchasing these items. Producers have also been affected as they received only $3.5 for every $1 they sold at retail level during this period.
In conclusion, it is clear that understanding the value chain is crucial for both consumers and producers alike when dealing with inflation-prone products like those found in the basic basket. The Undersecretariat’s research will shed light on these complex issues and help inform decision-making processes that can ultimately benefit all stakeholders involved.