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February 18, 2021

Argentina accuses Danone, Unilever of holding back supplies

The Argentinian government has accused some FMCG firms of deliberately holding back production of goods intended for the country's retail outlets.

By Leonie Barrie

The Argentinian government has accused French dairy giant Danone and Anglo-Dutch consumer goods heavyweight Unilever of deliberately holding back production of goods intended for the country’s retail outlets.

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Unilever product advertising is mainly through mainstream TV channels. Out of the products advertised so far at least 50% (over 850) of ads have been run on TV, while print media comes second with 496 ads. Unilever also utilizes social media platforms for advertisement. Unilever products are categorized by innovation ratings and tags in our product launch database. The North American region consists of almost 74 products with innovations related to the formulation of the product. Europe and other regions also have more products categorized under formulation-related innovation, followed by the packaging and positioning of the products. Most Unilever products are tagged with “High Vitamins”, “Recyclable”, and “Natural” tags to understand what the product differentiator is from other products available in the market. The majority of products belong to the personal care industry with a total of 5,788 products to date. This report, through the Unilever Example, illustrates how GlobalData Explorer enables you to:  
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They join Bunge, P&G, Mastellone, Fargo, AGD, Molinos Cañuelas, Molinos Río de la Plata, Paladini and Potigian, which are under investigation by the South American country amid price inflation seen on consumer goods of late.

In a statement, the country’s production ministry 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 nappies and cheese and said the firms under investigation must rectify the situation and restore stock levels.

A statement from the National Secretariat of Internal Trade - seen by just-food - noted large, mass-consumption companies are generating shortages "due to retention in their production volumes or lack of delivery of certain mass consumption products for their commercialisation".

The allegations were made, it said, after "verifying that the aforementioned companies had failed to comply with the notice to "increase their production to the highest degree of their installed capacity and arbitrate the means at their disposal to ensure its transportation and distribution in order to satisfy demand".

It said this agreement, established on 20 March, 2020, "establishes the legal framework for the implementation of the maximum prices [and] aims to protect consumers from possible price abuses and to guarantee the normal supply of products in supermarkets".

It added that, during inspections carried out in shops, inspectors identified some shortages in mass-consumer products. 

"Based on this evidence, inspections were carried out in the administrative offices of various supplier companies, which resulted in different information requirements on stocks and inventories during the months of November and December 2020 and January 2021," it said.

"From the analysis of the information sent by the companies, a significant drop in production or in the distribution of various product ranges was found. For example, the multi-national company Unilever, which manufactures food, cleaning supplies and personal hygiene, detected a drop of almost 100% in its inventory of dressings.

"In the food multi-national Danone, for its part, a significant decrease in the production and dispatch of cream cheeses and desserts was corroborated during the quarter surveyed."

The government has told the companies concerned that they have to "restore the stock levels registered to November 2020 and arbitrate the conducive measures to ensure the transport and provision of the products for effective marketing".

just-food asked Danone and Unilever for a response to the Argentinian government claims.

A Danone spokesperson said: "In reference to the statement issued by the National Secretariat of Internal Trade on the shortage of mass consumer products by different companies in the sector, Danone reaffirms its commitment to the production and supply of essential products throughout the country."

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Free Report
img

Unilever- A Deep-dive into Product Launches and Advertising Strategy

Unilever product advertising is mainly through mainstream TV channels. Out of the products advertised so far at least 50% (over 850) of ads have been run on TV, while print media comes second with 496 ads. Unilever also utilizes social media platforms for advertisement. Unilever products are categorized by innovation ratings and tags in our product launch database. The North American region consists of almost 74 products with innovations related to the formulation of the product. Europe and other regions also have more products categorized under formulation-related innovation, followed by the packaging and positioning of the products. Most Unilever products are tagged with “High Vitamins”, “Recyclable”, and “Natural” tags to understand what the product differentiator is from other products available in the market. The majority of products belong to the personal care industry with a total of 5,788 products to date. This report, through the Unilever Example, illustrates how GlobalData Explorer enables you to:  
  • Track product launches by FMCG companies to get an understanding of the product-level strategies including geographic concentrations, innovation types, product claim, category focus and more
  • Monitoring the advertising strategies of various brands and gain insights into channel focus, regional focus, and more
  • Perform company-level analysis to understand business model, size, and geographic focus
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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