March 18, 2005

Argentina's poultry industry agrees to cut chicken prices

Argentina's poultry industry Thursday agreed to lower the price of whole chicken to help the government contain inflation and make it easier for consumers to buy basic food items, the Agriculture Secretariat said in a statement.

Poultry producers, represented by the Center of Poultry Processors, pledged to lower the price of whole, gutted chicken to ARS2.80 ($1=ARS2.92) per kilogram, before taxes, for 90 days.

"It is fundamental for the federal government to preserve the purchasing power of its people, keeping in mind the cost of a family's basic food basket," the Secretariat said in a statement signed by industry leaders. "Given this, it is necessary for the sector and the entire (food) chain to have a responsible social and business attitude."

By the time chicken hits supermarkets, it will cost no more than ARS3.80 per kilogram, according to terms of the agreement. To ensure that consumers pay no more than that, the Secretariat signed another accord with the nation's largest supermarkets, which pledged to pass the savings on to customers.

Earlier this week the Secretariat announced it had reached an agreement with Argentina's beef industry to reduce prices on five of the most popular types of meat, including cuts like T-bone steak, ground beef and ribs.

Beef industry leaders promised to reduce prices by 10 percent for a 90-day period.

This week's food price agreements come at a time when both consumers and the government are worried about the impact of inflation, which was largely stagnant in 2003 and 2004.

However, inflation shot up in December, January and February, putting consumer prices up 8.1 percent from a year ago and causing concern that it could reach double digits this year.