Argentine Stores Mark Up Fridges to Wine After Peso Devaluation
At a Falabella store in downtown Buenos Aires, the price of a Whirlpool 80X1 model refrigerator has risen to 27,499 pesos ($3,437) from 21,199 on Jan. 22. In a Winery shop two blocks away, a bottle of Marcus Malbec now costs 226 pesos, 26 percent more than two days ago.
Retailers in Argentina marked up prices as this week’s 15 percent devaluation of the peso against the dollar increased the cost of imports and sparked expectations that inflation in South America’s second-biggest economy will accelerate.
“The fridge is assembled in Argentina, but all the components are imported,” Andre Viera, who sells appliances at the Falabella outlet on Florida Street, said in an interview. “The lady who came in on Wednesday and said she would be back to buy it on Saturday must be be suicidal.”
Argentina’s government devalued the peso and said it would lift a ban on the purchase of dollars for savings as President Cristina Fernandez de Kirchner seeks to win back investors, regain access to international debt markets, shore up a faltering economy and curb inflation that soared to 28 percent last year.
“Our administered currency policy has reached an acceptable level of convergence for our economic objectives,” Cabinet Chief Jorge Capitanich told reporters at the presidential palace this morning.
Lorenzo Sigaut, head economist at the Ecolatina research company in Buenos Aires, said the peso’s devaluation will lead to price mark-ups as Argentines anticipate cost increases and a further weakening of the peso.
“Devaluations generate uncertainty,” said Sigaut. “January was already a month of high inflation before they devalued. Transport, fuel, food and beverages all rose a lot. We estimate a minimum 3 percent rise in consumer prices this month.”
Ecolatina forecasts inflation this year will be 30 percent or more compared with 28 percent in 2014. The government, which has been censured by the International Monetary Fund for inaccurate reporting of economic data, said prices rose 10.9 percent last year.
Pedro, a salesman at the Winery store on Reconquista Street who wouldn’t give his surname, said the vineyard that produces the Marcus brand increased all its prices today.
While other Argentine wine producers hadn’t yet raised prices, the cost of imported drinks increased, including Veuve Clicquot champagne, which rose 18 percent to 654 pesos, he said in an interview.
No one was available at SACI Falabella’s Santiago headquarters nor at Winery’s press office to respond to calls from Bloomberg News after normal business hours.
Viera, the Falabella salesman, said he expected further rises.
“Buy today,” he said. “I heard there will be a new price tomorrow for all the products.”
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