(Bloomberg) -- The Argentine government aims to extend a price control program to 1,247 household goods in its latest attempt to recover ground with the voter base ahead of a midterm election next month.
The new Interior Commerce Secretary Roberto Feletti told business leaders at top food firms Wednesday in Buenos Aires that the government wanted companies to extend a program that caps prices on certain goods, according to people with knowledge of the meetings who asked not to be named because they were private. Argentina has a price control program known as Precios Cuidados, which currently has more than 700 products in supermarkets whose prices can marginally increase each quarter.
The government later confirmed that the price control agreement, which includes the items under Precios Cuidados, involves holding prices at their values on Oct. 1 and will apply until Jan. 7. In a statement, Feletti said the government is concerned that the basic food basket accounts for 11% of of expenses for average salaries, up from 9% in Dec. 2019.
“We need to hit pause to prevent food price hikes from eroding salaries,” he said.
Price controls are a perennial policy used by governments from Argentina's Peronist political movement as one of several unorthodox tools to try to cool inflation running at about 50% annually, hurting consumers' income. President Alberto Fernandez's coalition is looking to recover support after a primary vote held in September indicated it will likely lose congress seats in midterm elections on Nov. 14.
READ MORE: JPMorgan Expects Argentina Inflation Accelerated in September
Feletti spoke to about 100 business leaders and advocates Wednesday, including representatives from Danone SA, Nestle SA, Arcor SAIC and Molinos Rio de la Plata SA, according to a food industry official who attended. It wasn't immediately clear which prices would be frozen or how many companies would accept the measure, according to two people who attended.
The request comes a day before Argentina's statistics agency publishes inflation data for September. Analysts surveyed by Bloomberg expect 3% inflation month on month and 51.7% inflation annually.
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