Chamber of Commerce of Valencia warns of a possible shortage of products in 2023 after the implementation of price controls
Representatives of the Valencia Chamber of Commerce warned that shortages could be recorded during the first quarter of 2023, after the possible implementation of […]
Representatives of the Valencia Chamber of Commerce warned that shortages could be recorded during the first quarter of 2023, after the possible implementation of price controls on mass consumption products.
By La Patilla
Dec 12, 2022
The President of the Valencia Chamber of Commerce, Lorenzo Araujo, pointed out that when inventories run out, the consequences will be felt, because this measure makes it difficult for merchants to restock new products.
He stated that, according to the information they handle, the prices that are intended to be set for some products would be below the current sale prices.
“In Venezuela we should have already learned that when there are (price) controls, what is generated is a greater shortage of products and the supply in the market is reduced (…) If price controls are established again, and in fact, Sundde (Consumer protection agency), Seniat (Tax agency), and Mayoralties have been carrying out inspections, what it does is make it very difficult to acquire new products. If so, we will have shortages at the beginning of the year, because the manufacturers have closed their doors in December. If we add to this difficulties in acquiring the products, during the first quarter of the year we would be seeing the possibility of product shortages,” said Araujo.
Given this, the spokesman considered that to reduce inflation it is necessary to carry out other types of actions such as the reduction of municipal taxes, elimination of the Tax on Large Financial Transactions and interbank commissions, as well as allowing transfers in foreign currency between the different banks. “That makes, in some way, currency based economic development more anchored than currently is, which is why we could be stabilizing inflation,” he pointed out.
He pointed out that in the case of municipal taxes, these have resulted in higher product prices, since they significantly influence the cost structure.
After two years, authorities from Nicolás Maduro’s administration announced that the price control policy will be resumed.
On February 7th, the president of the Economic and Finance Commission of the pro-government National Assembly, Jesús Faría, reported that maximum retail prices had been established for more than 40 products.
He explained that the government authorities in economic matters agreed to the decision after the “alteration in the dynamics of prices.”
“After conversations with different sectors (…) a set of prices were agreed upon that should constitute the ceiling at which these products are sold, taking into account production costs, as well as reasonable profits, as established by law,” he said.
However, he did not specify when it will enter into force, nor in which articles it will be applied.
On December 1st, the Superintendence for the Defense of Socioeconomic Rights (Sundde) published (on line) a price list, but minutes later it was deleted. This price control policy has not been implemented since April 2020.
Growth In Economic Activity
At a press conference, the president of the Valencia Chamber of Commerce indicated that this year there was a 30% growth in commercial activity, compared to 2021.
He explained that at the beginning of 2022 they expected the increase to be higher, but the growth curve decreased in May after the implementation of the Tax on Large Financial Transactions and measures to restrict bank transfers.
“If we want to reactivate commerce for next year, the most important thing is that bank credit be reactivated so that commerce can acquire goods and inventories and that people have the possibility of financing purchases of large-scale products,” he highlighted.
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