Martin Bidegaray
05/19/2021 9:27 AM
Clarín.com
Economy
Updated 05/19/2021 9:27 AM
The Secretary of Commerce will begin to apply the
Gondolas law
and among some of the main companies there is concern about its feasibility.
Note from
design issues
to
operational issues
that could lead to
supply disruptions.
The regulation - which was voted on by legislators from the previous and current administrations - seeks
to have a greater number of players competing in
the supermarket shelves. It imposes limits on the participation of any company -which
cannot have more than 40% to 50% of the space
assigned to its category-, while it opens the game to SMEs or products of the "popular economy", that is, made by movements social.
"The objective is to provide consumers with a greater range of products in the large supermarket chains, both physically and virtually, and enable SMEs, cooperatives and family farming enterprises to have
equitable treatment
in the space they occupy in the gondolas compared to large food companies ", summarized in Productive Development.
The application within each category can have
severe differences
.
In fresh milk, for example, the main company (Mastellone) has
assigned repositors in the
most important
branches
of supermarkets.
There, they are replenishing as the sachets are dispatched, so that the gondolas are well supplied.
But that business decision pays for the costs if the company has the best display and high sales, such as its high market share.
On the other hand,
if space is limited, it will no longer be convenient for the company to assign repositories.
In dairy, some products compensate in profitability to others that leave less profit Photo: Mario Quinteros
“If you can't sell more than 40%, it doesn't make sense to have repositories.
Is the rest of the market able to supply the remaining 60%?
”Prods a consultant who works with dairy brands.
From the supermarkets they live the gondola law with a certain duality.
"On the one hand, it
reduces the negotiating capacity of
certain suppliers that are large, and
that is convenient
for the chains," reason the owners of the gondolas.
But, on the other, there are categories where there are no competitors.
It will be the government's job to develop them
”, they explain.
Oral care brands (toothpaste, brushes) are few.
They have almost no competition.
The law says that 20% must be SMEs and 5% must be products of the popular economy.
And
that doesn't exist
now, according to supermarket executives.
Not all categories are the same
The idea of the Gondolas Act is
that increased competition helps lower prices
.
But it treats all categories with a certain
homogeneity.
In dairy, for example,
the same companies are in different categories:
milk, yogurt, desserts, butter, dulce de leche.
In some products they earn less (milk), but in others the profitability is higher (dulce de leche).
If you prohibit them from using certain spaces - such as gondola tops or islands, where products have more visibility - they may face
more competition in profitable items, but not in less profitable ones.
Thus, for the company it will be a
lack of incentives
to be in the category that earns less.
That can lead to stockouts.
"
Each category must have at least five
different
suppliers
and that none exceed 30% of the exhibition space in gondolas; for each category there must be at least 25% of exhibition space in gondolas for micro and small companies; and less 5% of exhibition space in gondolas for companies of family / peasant / indigenous agriculture and sectors of the popular economy, "they detail from the Government.
"In addition, in the
displays that are next to the
supermarket
checkouts,
half of the space has to be allocated to micro and small companies, mutuals and cooperatives," they add.
“The Government talks about sending inspectors.
However, it seems that
a manual on how it will work
is
missing,
because it is not clear.
There are gray areas.
Should
we leave 25% of the shelves empty if there are no products from SMEs
and products from the popular economy?
In supermarkets they wonder what happens if there are no suppliers for a category of products: should they leave the shelf empty?
Photo Andrés D´Elía
The scope of the legislation is for
branches of more than 800 square meters
.
That would leave the ground free for the main suppliers to continue concentrating on the smaller stores, which would not be understood by that limit.
“Companies work with scales.
Negotiations with supermarkets are permanent.
You put a product on sale, you can lose money, but you make up for it with another that has a higher margin.
That is a constant dynamic.
If the government's idea is to limit that,
the result can be unpredictable
”, they confess in a multinational.
In some SMEs that always wanted to enter supermarkets and could not, there is no satisfaction with this legislation.
They see it as a platform for more equitable competition.
“
It is being seen in some categories that there are a greater number of brands
, which even relegate some historical ones, as is happening in
soft drinks
.
But in many segments there are only the big players, there is no competition ”, reason in another supermarket.
There are categories where the
barriers to entry are high.
They require a significant investment.
In order for SMEs to enter there, the sector believes that they will need some stimulus from the State.
“
I do not think that foreign companies want to come to compete in Argentina attracted by the Gondolas law.
Rather the opposite ”, they raise in a signature of drinks.
NE
Look also
Gondolas Law: the Government already sends inspectors to control supermarkets
Gondolas Law: what it is and what changes it proposes