Mexico’s government has announced a renewed initiative to reinstate price controls on essential food items for a duration of six months.
In a social media update on November 12, President Claudia Sheinbaum, who was recently appointed, confirmed the government’s decision to renew the Package against Inflation and High Cost of Living (PACIC) agreement that was initially established in 2022.
According to Sheinbaum, the PACIC agreement will establish fixed prices for “24 products in the basic basket,” with a maximum price set at 910 pesos, equivalent to around $44.2. This marks a 129-peso decrease compared to the prior agreement, which set the price at 1,039 pesos.
In 2022, Sheinbaum’s predecessor, Andres Manuel Lopez Obrador, eliminated import duties on several staple food items, including bread, potatoes, tuna, beef, chicken, milk, eggs, and cornflour. The initial agreement was expected to last for at least a year.
Among the 24 essential products covered by the latest agreement are pasteurized whole milk, basic cornflour, packaged bread, whole chicken, rice, vegetable oil, and canned sardines. An official announcement from the Ministry of Finance and Public Credit indicated that the new 2024-2025 PACIC agreement has been accepted by 19 food companies and 11 marketing firms.
Several prominent manufacturers have agreed to the terms of this deal to stabilize product prices. These manufacturers include Grupo Bimbo (baking), Pilgrim’s (poultry), Maseca (cornflour), and Verde Valle (packaged rice and legumes). Retail giants such as Walmart, Soriana, La Comer, and SuperKompras have also signed on to the terms of the PACIC agreement.
The Ministry of Finance emphasized that the private sector is committed to stabilizing the prices of basic goods, a move anticipated to create more balanced expectations between producers and consumers. Moreover, the ministry has noted that a review of value chains will be carried out for products such as corn-nixtamal tortillas and other essential food staples in Mexico.
According to the National Institute of Statistics and Geography (INEGI), inflation in Mexico stood at 4.76% in October year-on-year.
During a press conference on November 11, Sheinbaum outlined plans to enhance domestic bean production by increasing the guaranteed price for beans to 27 pesos per kilogram. Additionally, the government is working on developing “improved seeds” in collaboration with small- and medium-sized producers. The administration is also coordinating with the states of Tabasco and Campeche to explore ways to boost livestock and rice production.
In summary, this new PACIC agreement reflects Mexico’s proactive approach to navigating current food and beverage industry trends, reinforcing both consumer confidence and market stability. The efforts to control prices on essential goods align closely with ongoing trends in the food and drink business, focusing on consumer needs and market responsiveness.
