PepsiCo has laid off staff at a snacks and crackers plant in Argentina, citing “challenging” macroeconomic conditions.

The US giant has cut 36 of the close to 400 jobs at the site in General Pueyrredón in Buenos Aires Province

When contacted by Just Food, sources at PepsiCo said the company “recognises that this decision is extremely difficult and will dedicate all its efforts to accompany this process with the greatest care and respect for its collaborators.”

They said the decision was made “to ensure the long-term viability” of the company in Argentina in what they said is “a challenging economic environment, marked by falling production volumes”.

PepsiCo did not disclose figures on production volumes at the plant.

However, the long rally of two-digit monthly inflation in Argentina has consumer demand for food and basic goods. The local SME chamber, the Confederación Argentina de la Mediana Empresa, said last week food and beverages retail sales dropped yearly by 15.5% in March and contributed to a 28.7% decline in the first quarter.

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On Friday, Argentina’s National Institute for Statistics and Census (INDEC) said consumer prices for food and non-alcoholic beverages increased 10.5% in March against the previous month, which meant prices of those products had risen 48.9% since December 2023. Compared to March 2023, prices for food and non-alcoholic beverages are up 308.3%.

The General Pueyrredón factory produces salty snacks, sweet crackers and biscuits for the domestic market. It also exports to Chile, Uruguay and Paraguay.

In 2018, PepsiCo completed a $28.7m expansion of this facility to increase salty snacks production with six new lines.

The company added: “PepsiCo reaffirms its commitment to Argentina beyond the short-term situation, and emphasises that this measure aims at the sustainable development of the company in the country in the long term.”

The Food Industry Workers Union STIA is demanding the reinstatement of the 36 workers. STIA was not available for comment at the time of publication.