Why Does An Electric Kettle Cost 2 1/2 Times More Here?

[TWB103]

Compared to the UK at least some consumer goods prices aren't so bad - maybe 35% more expensive for like for like items such as tvs, washing machines etc. I can handle that.

But other things like many electric kettles, cameras or laptops etc are crazily more expensive - like 2 and half time more so.

Anyone know why? And I dont think its about whether the item was made/assembled in Argentina or not or volumes sold

The fear the answer probably starts '(sigh).. Its complicated in Argentina... '

 

[Davidglen77]

Businesses here pay TONS of taxes such as: IVA, ingresos brutos, check tax, employee's social security taxes are VERY high, approximately 55% of employees' salaries, bribes, arbitary expenses pop up ALL the time, VERY high bank fees for basic things like account maintenance and credit card processing. The spread between wholesale and retail prices here is big, if you can buy things wholesalers (mayoristas) NOT Walmart....or at small businesses that have less overhead. You will generally get better pricing. On top of all that if you DO turn a profit, you owe 35% of that to AFIP which is called "ganancias".

 

[TWB103]

The point I was trying to raise was the discrepancy. Some things are 35% more expensive here than in the UK others are more than 100% more expensive and for things that fall within the same categories ie electric kitchen goods.

 

[Dublin2BuenosAires]

Transport is highly unionised, it costs a fortune to move stuff around the country. Your imported goods have lots of tax applied before they even get here, then there are the bribes which get paid to even get something in the door. Inflation is 30+ , so your cost of employing anyone (in black or white) rises astronomically. You probably dont want to raising the price of your product by 30% plus every year so that risk gets priced.

If it's made in Argentina, that generally just means someone on a production line stuck bits of it together in Patagonia somewhere. You pay the gas and union fees to get it up the road, rail infrastructure is poor, road network is slow.

I suggest you have a think about "supply chain" and understand all the potential points from your kettle starting off life as a bunch of chemicals and a little bit of metal to heating up your water in your apartment. Argentina specialises in getting it's arm in at every stage of the chain and ensuring the kettle has been taxed as many times as humany possible before it heats up anyones maté.

Of course, whether it's made in Argentina or not is hugely significant, i am not sure why you dismiss this. At it's core Peronism promotes internal industry above external imports. Naturally, anything made outside of the country comes at a price for being not being "Industria Argentina"

 

[Dublin2BuenosAires]

The point I was trying to raise was the discrepancy. Some things are 35% more expensive here than in the UK others are more than 100% more expensive and for things that fall within the same categories ie electric kitchen goods.

It generally does matter where they were produced, from an import perspective there are tax codes for every single component, before you get near ganancias. Imported within Mercosur = less tax, inside Arg. = less again.

 

[TWB103]

[background=rgb(252, 252, 252)]--Of course, whether it's made in Argentina or not is hugely significant, i am not sure why you dismiss this. At it's core Peronism promotes internal industry above external imports. Naturally, anything made outside of the country comes at a price for being not being "Industria Argentina" --[/background]

[background=rgb(252, 252, 252)]I'd say things made in Argentina are a bit cheaper,not much cheaper, when talking about equivalent goods and when you consider the quality trade off in many cases...[/background]

 

[ajoknoblauch]

At its core Peronism promotes internal industry above external imports. Naturally, anything made outside of the country comes at a price for being not being "Industria Argentina"

Actually, Peronism is all about manufacturing shabby domestic products that have to be replaced in short order. Think of "planned obsolescence" as applied to automobiles elsewhere.

 

[Dublin2BuenosAires]

[background=rgb(252,252,252)]--Of course, whether it's made in Argentina or not is hugely significant, i am not sure why you dismiss this. At it's core Peronism promotes internal industry above external imports. Naturally, anything made outside of the country comes at a price for being not being "Industria Argentina" --[/background]

[background=rgb(252,252,252)]I'd say things made in Argentina are a bit cheaper,not much cheaper, when talking about equivalent goods and when you consider the quality trade off in many cases...[/background]

Regardless of quality, there are a wide range of frankly punitive import taxes to pay for imports. This probably keeps the local quality as low as the market accepts as there is limited competition and difference in the offering.

Drean & Candy washing machines for example are all manufactured in Cordoba, in the same plant. They are the exact same machine with slightly different external branding. The only difference is usually a badge and the shape and colour of the control panel. This at very least allows Drean & Candy to participate in tacit price fixing. They have no room to manouevre in terms of the cost ot manufacture so cannot really compete much on price. At some stage you have to suspect a gentlemans agreement would be put in place.

Depends on the product, where it is manufactured (same plant, different badge) and which taxes apply. Monopolies have an impact in terms of union monopolies (cost base in terms of wages) and monopolies in terms of price fixing, which I have no evidence of but suspect is fairly widespread. Sometimes for political reasons as much as economic ones.

 

[Dublin2BuenosAires]

Actually, Peronism is all about manufacturing shabby domestic products that have to be replaced in short order. Think of "planned obsolescence" as applied to automobiles elsewhere.

Not even remotely specific to Argentina, albeit certainly true here too.

 

[ajoknoblauch]

Not even remotely specific to Argentina, albeit certainly true here too.

True, but usually small items like electric kettles will last for many years elsewhere. Here you must replace them frequently.