Food, Medicine and Price Rise

The business sector in Guatemala is anticipating an increase in the prices of food and medicines, due to the government's decision to raise the cost of procedures such as the issuance of licenses and health registrations, required to market these products.

Wednesday, December 2, 2020

By means of Government Agreement 179-2020, which entered into force on December 1, 2020, new fees were imposed for the services of procedures for licenses, registrations and other processes for medicines, laboratories, pharmaceuticals, food products and others.

According to businessmen, who have been affected by the increase in the cost of their operations, with the modifications applied there are costs that have risen between 1,000% and 4,000%, increases that will inevitably be reflected in the prices of the products and will affect the final consumer.

After learning about the changes in rates, representatives of the Chamber of Industry of Guatemala (CIG), the Guatemalan Association of Exporters (Agexport), the Association of Pharmacists and Chemists (Cofaqui) and the Chamber of Commerce of Guatemala, expressed their dissatisfaction.

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Giovanni Cardona, president of the Cosmetics and Hygiene Commission of Agexport, told that "... several organizations requested the officials to repeal the governmental agreement 179-2020 (which was signed by the president Alejandro Giammattei), raising the taxes mentioned and to install a technical discussion table."

The businessmen were surprised by these adjustments, since the rates began to be discussed in 2017 and were approved during the administration of Jimmy Morales, president who signed an agreement, however, at that time it was not published in the Diario de Centroamerica.

Claudia Garcia, a pharmaceutical chemist and member of the board of directors of Cofaqui, explained that it is worrying that "... the price of some health records increased up to three and four times their cost. The problem is that this will translate into an increase in the cost of medicines and health services provided to the general population. The increase in these fees will also reflect an increase in the price of medicines, clinical laboratory services and medical consultations with health professionals."

According to Garcia, the Ministry of Health did not ask Cofaqui's opinion, as it had on previous occasions, and neither was there any time for health professionals to prepare for the new tariffs to take effect.

A statement from the Chamber of Commerce dated December 1, 2020, states that "the increases in fees contemplated by this Agreement are not justified, since the service provided remains the same and instead will cause a great impact on the Guatemalan economy.

It is important to note that increasing administrative costs reduces competitiveness, discourages investment and increases prices for the final consumer

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