Price controls placed on some cuts of meat have altered the prices of other cuts not included in the measure, distorting the entire supply chain, from producer to consumer. My partner is now able to sell at $1.15 per pound live weight.
The intention to control the prices of some food products does not seem to show results in the meat sector, as final prices and production costs have been altered for several reasons, including the decision by producers to reduce their shipments of regulated cuts to supermarkets and increase exports to other markets, so as to not reduce their profits.
Prices have risen since the price control measure was implemented “by… up to 94%, according to the Authority for Consumer Protection and Antitrust.
Panamaamerica.com.pa reports that “… Beef is sold by farmers at $1.62 a kilo, then the price increases to $3.50, as it is sold by butchers to supermarkets at this price. The other increase is seen when the consumer buys the product, because businesses will double the price so that it ends up being $7.50 a kilo.
“… The president of the National Cattlemen’s Beef Association (Anagan), Julio Ramirez, said the rise in the price of meat comes after the product is sold by farmers, since they lose control of the price because no do not butcher, distribute or retail it.”
Furthermore, “…The increase in meat cuts is due to the fact that the value of cattle has risen because of the decrease in the total number of cattle in the country due to drought. ”
What a surprise ! Price controls make things more pricey. Who would have guessed ?
Once such administrations realize that their orders are not being followed, they usually introduce more rules and regulations. When they do not work, the government then usually resorts to nationalizing the supply chain. Ultimately Panama could end up like Venezuela: a probable role model for Varela.
Expect shortages, higher prices and spending more time looking for black market supplies. So much for the govt. helping poor people.
Panama sorely needs a more open economy , more competition and less costs from Customs, in my opinion.