Menger Effect: Supermarkets reject lists with price increases following the rise of the dollar

Menger Effect: Supermarkets reject lists with price increases following the rise of the dollar
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Both supermarkets, wholesalers, and small businesses rejected the price lists with increases

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After the recent increase in the dollar, supermarkets began receiving lists with price increases ranging from 5% to 9%. However, the chains state that they refuse to accept these increases, which represents a new example of the "Menger effect".

The situation is reminiscent of what happened after the removal of currency controls in April, when there was significant tension between manufacturers, who demanded to implement increases, and supermarkets, who resisted validating them.

During July, stores did not receive new lists with increases, unlike other times when preventive increases were widespread to anticipate possible economic changes.

But with the rise of the dollar in recent days, several companies in the food, personal hygiene, and cleaning products sectors began to communicate their intention to implement adjustments starting in August. Among the affected products are cookies, alfajores, chocolates, condiments, toothpaste, deodorants, repellents, disinfectants, toilet paper, paper towels, and oils. Some chains may have already received calls from suppliers announcing these changes in advance.

Among the companies that may have driven increases is Mondelez, a multinational that owns brands such as Terrabusi, Oreo, Milka, Tita, Rhodesia, Beldent, Tang, and Clight. According to industry sources, the company may have implemented an adjustment close to 9%.

Supermercado.
Supermercado.

According to information provided by supermarket chains, Unilever announced increases in its products ranging from 7% to 8%. The multinational is responsible for brands such as Hellmann’s, Knorr, Dove, Axe, Lux, Comfort, and Lifebuoy, among others.

Nevertheless, the company clarified that the new price list, which takes effect this August 1, was sent on July 15. They argued that it is an update linked to accumulated inflation, after several weeks in which prices were "lagging behind".

They denied that the adjustments are a response to the recent jump in the dollar and stated that the increase was already scheduled, after several months without changes. They also emphasized that it is standard practice to give clients 15 days to adapt.

Supermarkets also pointed out that SC Johnson implemented increases close to 7%. Among its most recognized brands are OFF!, Fuyi, Raid, Glade, Lysoform, Mr. Músculo, and Blem.

Other companies may have adopted similar positions: Papelera del Plata, responsible for the Softys brand, with increases of 7%; Colgate, with adjustments of 6.5%; Papelera San Andrés de Giles, with the brands Giles and Campanita, with 6%; and some companies in the oil sector, with increases around 5%.

For now, supermarkets, wholesalers, and small businesses alike have decided to reject these updated price lists. On the manufacturers' side, they justify the increases by the rise in the dollar. Still, they stated that "not all the increase is passed on to the final price," since they claim to absorb part of the impact.

They also acknowledge that the margin to raise prices is limited, despite the need to recover profitability. For this reason, they indicate that the increase at the shelf will be lower than the rise in the exchange rate.


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