Small retailers warn that the tax adjustments will trigger a cascade of increases.
MEXICO CITY (Agencies) – The update of the “excise tax on production and services” (STPS) for 2020 on soft drinks and cigarettes, as well as gasoline and diesel, has caused grocery and miscellaneous stores to be alerted by their suppliers that as of Jan. 2 there will be price increases on multiple products, said Cuauhtémoc Rivera, president of the National Alliance of Small Businesses (Anpec).
Distributors of specific products and brands, such as Lala, Alpura, Nestle, Modelo, Marinela, Tia Rosa, Gamesa, Sabritas and Barcel, have warned small traders that there will be price increases, but without specifying the amount or date, according to an Anpec survey among its members.
According to information from the National Alliance of Small Businesses (Anpec) small traders will close 2019 without increases, except in one case: the white bread, since at the end of November Bimbo raised two pesos all its product presentations.
The increases on soft drinks and cigarettes were already expected by the fiscal miscellany approved for 2020, but suppliers and distributors of large companies, have made its clients aware of the fact that cakes, cookies, snacks and sweets, will be more expensive since these are products of “high caloric content”, even thou the percentage rate is still to be determined.
“Authorities and legislators insisted that there will be no tax increase in 2020, but even if they say that the STPS was only updated or adjusted, in fact, for practical purposes, it is an increase and the one applied to gasoline and diesel will impact the entire supply chain. It’s like a license to raise everything,” (SIC) said Cuauhtémoc Rivera.
Rivera highlighted the case of milk, a basic product of high consumption among Mexican families, whose price will be adjusted “coincidentally” when the children return to school, which, he said, will be a setback on the popularly called “January hill”.
A liter now costs between $13.50 and $22 pesos, depending on the brand, characteristics and where it is sold, according to the Federal Consumer Protection Office.
Rivera said large companies that supply grocery stores or miscellaneous stores never issue official notice of price increases to their products, but it is their salespeople or distributors who warn merchants.
Starting Wednesday the STPS will have a rate of $1.2616 pesos per liter in soft drinks and flavored drinks, $0.4944 per cigarette, $4.95 per liter of gasoline Magna, $4.18 to the Premium and $5.44 to diesel.
With this, consumers will pay 14 cents more per cigarette, 9 cents per liter of soft drink, 32 cents per liter of Magna, 12 cents per liter of Premium and 80 cents for diesel.
Although the Anpec leader admitted that these and other increases may be marginal, he said “let’s see how long we can keep the happiness of the 20 percent increase in the minimum wage. This, because of the increase on prices. Above all because the monthly reviews of the National Alliance of Small Businesses show that commodities have not stopped becoming more expensive during 2019”.
Source: The Yucatan Times