Why you can’t find a Big Mac on Argentina’s Mc Donald’s menu?
Argentina’s booming economy has been one of the few bright lights in an otherwise gloomy global financial picture the last few years. But inflation of up to 25% threatens that growth. It's one of the world’s highest inflation rates, reports the US public funded Public Radio International.
The Argentine government insists the number is much lower: under 10%. And it’s enlisted the world’s most famous hamburger to help make its case, in a mysterious way, or so it seems. Step in line at any McDonalds. And you’ll find there’s no Big Mac on the menu.
“It’s really hard to find the Big Mac on the board here. Like, there’s no picture,” said economist Miguel Angel Boyano. But if you want to order one? No problem.
And compared to what is on the menu, like a quarter pounder or chicken McNuggets, the Big Mac is cheap. With fries and drink, it’s just 22 pesos, or about 5.50 dollars. The other meals start at 33 pesos.
So why are the Golden Arches hiding those two all-beef patties, special sauce, lettuce, cheese, pickles and onion on a sesame seed bun? And selling them at 30% off? Boyano’s not surprised at all. In fact, he called it, “an obvious thing.”
Boyano said Argentina’s current government, especially commerce secretary Guillermo Moreno, is notorious for telling companies to fix certain prices to keep the official inflation rate down.
“I’m 100 percent sure they told the guys at McDonald's, listen, you won’t sell this meal over this level. So they actually fix it about 30% below the other ones,” Boyano said.
The Economist magazine publishes one of several inflation indicators. Its famous Big Mac index uses the prices of Big Macs worldwide to measure inflation rates. The magazine called out Argentina last year for manipulating the price.
There’s broad consensus among private economists here that inflation is more than double the government’s official rate. Last year, President Cristina Fernandez administration sued 12 economists for publishing their own figures, including those of former Undersecretary of Finance Miguel Kiguel.
Kiguel said the government’s sticking to the lower rate, under 10% instead of 25%, hoping to curb expectations.
“If they can convince people that the inflation is 10%, all of a sudden, wage increases would be 10%, and people would demand only 10% wage increases,” he said.
But that’s not happening. Right now unions are insisting on 25% wage increases, and in the past, they’ve gotten them. Kiguel’s firm, Econviews, consults with foreign companies. He said investors otherwise bullish on Argentina may get spooked by the government’s increasing hand in the domestic economy.
“Lots of controls on imports, controls on exports, also controls on sending dividends abroad,” he said. “But, you know, firms that operate in a country like this, pay attention to this.”
President Fernandez has actively defended the government intervention, saying it’s the only way for her small country to develop mature industries that can compete with the United States and Western Europe.
Fernandez de Kirchner is popular with Argentines, having won a landslide election last October. But that doesn’t mean they buy her government’s inflation figures.
The Argentine government has stayed mum on the Big Mac controversy. When local media asked McDonald's why its most famous product was removed from displays, the company said it’s just marketing new products, like a “Triple Mac”.
But if it’s a fast food deal you’re looking for, the Big Mac may be Argentina’s worst kept secret.
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when they are ordered to have a KFC .
www.youtube.com/watch?v=VzXq7vY9xVo
I agree re betos lomitos.
That is why they are jealous, McDs is considered a treat in ARG while in the USA it is just plain fast food.
This is the REAL point. Price fixing doesn't work. Let the price fetch what it will. If people don't buy it, then Mickey D's will disappear. Can't say that would be a bad thing.
And Argentinian inflation is caused many times because basic industries like energy, food, communication do not want to invest to expand the offer. Argentina has been growing a lot, but if you have corporations that in front of this situation prefer to rise the prices in stead of producing and selling more (like in here), then you get inflation.
The Government is now being criticized because it asks main petrol company in Argentina (YPF) to produce more in stead of selling more expensive. But producing more is needed in order to avoid the rising of prices.
If you don't control huge companies they do whatever they want and prices get high.
@ 9 laceja: “Price fixing doesn't work” I would love to believe in the “invisible hand of the market” that accommodates and balances everything, but the truth is that THERE IS ALWAYS PRICE FIXING, corporations do it all the time. It is good to have it fixed in a way that basic products are accessible to everybody, but most of the times lazy companies don't want to produce more.
Also foreign huge enterprises like Cargil and other owners of cereals and other raw material to produce food speculate with prices, this is a problem for Argentina and for the world also.
In the last 15 years the price of food in the world has rised A LOT.
All this doesn't mean that I agree with the Government's policy on inflation, but they are not the ones rising prices...
My Favorite statements...
If you don't control huge companies they do whatever they want and prices get high.
but most of the times lazy companies don't want to produce more.
Truly astonishing....
Inflation: rise in the general level of prices of goods and services in an economy over a period of time. That's what my English dictionary says.
So I'm going to do it simple for you. You know Offer and Demand? I think you must. So this little thing called demand has being growing a lot since 2002. It did. FACT.
Now did Offer grew that much? No. It didn't. FACT.
So now if we have only 10 cars and 20 people wanting to buy them, we get a situation similar to a (altough not at that scale).
Also, as people is getting a bit more money overtime, salesmen think they can rise even more the prices.
Now this inflation is so big it creates a situation were people is not sure how much prices are going to rise, so they buy stuff as soon as they can. And this makes inflation even bigger, as it makes demand bigger.
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