Francisco Camacho, the president of the local subsidiary, announced the deal in a televised press conference at the presidential offices. Last week, both Mastellone Hermanos (MLH.YY) and dairy cooperative Sancor signed price-freezing agreements with the government, pledging not to raise prices on six products.
Although the accord calls for prices to be frozen for one year, the terms of the agreements are subject to review every two months. Echoing what other company executives said last week, Camacho said "We will have provisions in that every two months, we'll see what factors are affected and what is the cost structure of these products." The dairy producers say they will be monitoring the cost of raw materials and labor, which are expected to tick higher this year.
The government is expected to announce several more price agreements with individual companies and sectors on Friday, pushing ahead with efforts to broker deals at the industry level. Though economists have criticized this strategy as ineffectual, officials say this is the best way to contain price rises, especially for sensitive consumer products. Inflation was 12.3% for all of 2005.
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