Price Increases Approved for Products Subject to Maximum Prices

The Subsecretariat of Consumer Protection ("Subsecretariat") issued Provision 13/2020 on July 15, 2020, which authorizes an increase in the prices of certain products subject to maximum prices under Resolution 100/2020 of the Secretariat of Local Commerce (“SLC”).

In the context of the sanitary emergency declared due to COVID-19, and within the regulatory framework of the Supply Act (Law 20,680) and the Fair Trading Decree (Decree 274/2019), on March 20, 2020, the SLC established as maximum prices for certain mass consumer products their values ​​in force on March 6, 2020 through Resolution 100/2020. Resolution 100/2020, which had an initial 30-day validity period, has been successively extended and will be in force until August 30, 2020.

On June 19, 2020, through Resolution 199/2020 the SLC authorized the Subsecretariat to establish new maximum prices when changes in the cost structures that substantially affect the financial equation of those obliged under Resolution 100/2020 were proven.

Thus, and considering the changes in the cost structures since March 6, 2020, Provision 13/2020 set new maximum prices for the following product categories that must be determined according to the maximum percentages indicated below: a) Dairy and Fresh products: 3%; b) Flours, noodles, cookies and baked products: 4%; c) Home cleaning, Kitchen and Bazaar: 2.5%; d) Personal care: 3.5%; e) Beverages: 4%; f) Cooking oil: 4%; g) Infusions: 4.5%; h) Rice and legumes: 4%; i) Canned products, sweets, sweeteners and pickles: 3%; j) Soups, broths, mashed potatoes, dressings, condiments and snacks: 2%; k) Frozen Foods: 2.5%; and i) Pet food: 2%.

To determine the new maximum prices, Provision 13/2020 authorizes companies included under Resolution 100/2020 (those who participate in the production, distribution and supply chains of such products) to apply over the price in force on March 6, 2020, the corresponding increases up to the maximum of the allowed percentage.

Provision 13/2020 also ordered to have at each point of sale the price lists of each product included under Resolution 100/2020, and to include in those (i) the maximum price in force on March 6, 2020 and (ii) the new maximum price after the enforcement of Provision 13/2020. Such lists must correspond to each specific point of sale and must not be generic lists in the case of chain stores.

The new maximum prices are effective from July 15, 2020 and will be mandatory while Resolution 100/2020 remains in effect.