Argentina accuses Danone, Bunge, P&G of output curbs amid pricing crackdown

RIO DE JANEIRO, BRAZIL – Argentina is investigating consumer firms including Danone, Procter & Gamble and Unilever, along with food producers like Bunge, over accusations they have deliberately held back production amid a government clampdown on rising prices.

The country’s production ministry in a statement alleged that the firms and others had been “holding back production volumes” and had not abided by a resolution to increase output to the “highest degree of their installed capacity.”

It said an investigation had found shortages in supermarkets of products ranging from cooking oil to diapers and cheese, and said that the firms under investigation must rectify the situation and restore stock levels.

The companies did not immediately respond to emailed requests for comment.

Daniel Funes de Rioja, head of food industry chamber COPAL, rejected the allegations and told media that the industry had pushed forward despite high costs and price freezes.

The companies supplied the market “throughout the pandemic despite sick workers, logistical problems, striking oil workers, the 15-day blockade by truckers, holidays, staff vacations and plant shutdowns for maintenance,” Funes de Rioja said.

But production minister Matías Kulfas said the government had detected “some products were missing in supermarkets” and had attributed the shortages to lack of supply from large industrial producers.

The South American nation’s leftist Peronist leaders have been trying to protect consumers from rising prices and rein in rampant inflation, forecast in a central bank poll to hit 50% this year.

The government of Argentine President Alberto Fernandez has clashed with some businesses and investors over price caps on some goods and the freezing of utilities tariffs.

On Wednesday, holders of Argentina’s sovereign debt criticized such policies as short term and doomed.

The production ministry said that price cap laws aimed to protect consumers from “possible price abuses and guarantee the normal supply of products in supermarkets.”

Recent fears over resurgent inflation sparked tension between Argentina’s government and the large farm sector, which were eventually defused after pledges by exporters and producers to help keep domestic prices down