Argentinas government has accused firms of failing to meet agreed production levels

Argentina's government has accused firms of failing to meet agreed production levels

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.

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."