Argentina to Probe Danone, P&G, Others Amid Price Clampdown
(Bloomberg) -- Argentina’s government is investigating several food companies for allegedly withholding production or deliveries, possibly increasing oversight of an industry that already faces widespread price controls.
The Production Ministry plans to investigate Danone SA, Unilever PLC and Procter & Gamble Co, among other firms, for not “increasing production to its highest level of installed capacity” and ensuring proper delivery, according to a statement published Wednesday. The ministry says its goal is to protect consumers.
Danone and Unilever didn’t respond to emails requesting comment. A spokeswoman for Procter & Gamble said the company, with more than 800 employees in Argentina, has always complied with local regulations and has received notice from the government and is reviewing the case.
The probe is another chapter in the uneasy relationship between businesses and President Alberto Fernandez’s administration. His government has implemented widespread price controls, defaulted on private creditors, restricted companies’ access to the foreign exchange market and unsuccessfully attempted to nationalize a company. In January alone, Argentina’s communications regulator demanded that phone and Internet companies roll back price increases, while the government forced supermarkets to lower beef prices after they shot up.
Fernandez’s government says the food companies violated a resolution that’s key to its price-freeze program known in Spanish as Precios Maximos, which is currently extended until the end of March. Officials have also doubled the amount of products in a separate price-control program that only allows businesses to marginally raise prices, well below inflation.
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