The newly elected President Juan Carlos Varela has fulfilled a principal campaign promise and has instituted price controls on 22 basic food items in Panama. The move comes as a result of food prices inflating at a faster rate than overall consumer prices.
Potatoes, beans, chicken, tuna, rice, milk, eggs, and steak are some of the items now under control. The price controls allegedly save an average family US$58 a month.
While noncompliance with the price controls could cost up to US$10,000 in fines for a store, Panama’s Consumer Protection Authority Director Pedro Mailán stated that 191 of 433 stores checked were not in compliance—a 46% noncompliance rate. He noted that most stores stated confusion about some aspects of the law. Store checks will take place again in two weeks.
The price controls have come under fire from some, claiming that price controls will interfere with supply and demand principles. The Panamanian Chamber of Commerce has noted that the controls fail to allow prices to take a product’s quality into account.
Proponents of the controls claim that run-away inflation of food items was padding the wallets of rich supermarket owners at the expense of low-income individuals.
The control of food prices will undoubtedly upset Varela’s predecessor and ex-boss, Ricardo Martinelli, who owns a supermarket chain in the country. Varela had served as vice-president in Martinelli’s administration before breaking away from the coalition, alleging corruption within Martinelli’s Democratic Change party.