Amidst the escalating rise in inflation, the Undersecretary of Consumer Defense and Commercial Loyalty, an arm of the Ministry of Economy, has announced plans to conduct new studies on the value chains of essential products in the basic basket. The aim is to gather information about the factors that contribute to the formation of prices of the foods that people consume the most and have seen significant increases in the past year.
The value chain refers to a series of activities that add value to a product or service. By analyzing these activities, the portfolio aims to determine a company’s competitive advantage and provide consumers with insight into how much they are paying for a particular product or service. According to an official source, this analysis can help businesses make informed decisions about pricing strategies and allow consumers to better understand where their hard-earned money is going.
The Undersecretariat will begin by examining the value chain of staple foods such as oil, rice, and fruits and vegetables. These types of products have been hit particularly hard by inflation in recent years, making them a priority for study. From a private sector perspective, similar surveys have been conducted in response to rising food prices.
A recent report from CAME highlights how taxes play a significant role in shaping food prices. In December 2023 alone, agri-food prices multiplied by 3.5 times from field to shelf. Additionally, taxes accounted for 25% of the final price of food according to FADA’s Agricultural Foundation for Development in Argentina.
The increase in food prices has had a profound impact on families’ budgets, especially those with lower incomes who allocate a larger proportion of their income towards purchasing these products. Producers also feel the effects as they struggle to keep up with consumer demand while receiving less payback for their efforts due to higher production costs and reduced profit margins.
In conclusion, understanding how food prices are formed through value chains analysis can help both producers and consumers make more informed decisions about pricing strategies and consumption patterns respectively. With this knowledge, businesses can better understand their competitive advantages while consumers can be more mindful of their spending habits during inflationary periods like we are currently experiencing globally