In the economic crisis, Argentina becomes a destination for “supermarket tourism

“Food tourism” is the term used to explain why Uruguayans cross the border Argentina aiming to buy cheap food and fuel from its crisishit neighbor. However, this trend has led to companies near the border falling into a crisis of their own.

The price differentials have created an economic dilemma for cities on Argentina’s borders with Bolivia, Chile and Uruguay. This is because Bolivian, Chilean and Uruguayan traders are unable to compete with Argentinian prices, which are often just a short distance away.

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Argentina struggles with inflation above 100%. Its currency, the Argentine peso, has lost about 25% of its value against the dollar this year.

In Uruguay, for example, annual inflation is 6% and the local currency has appreciated significantly against the dollar, increasing Uruguayans’ purchasing power in Argentina’s markets.

Also read: Uruguay challenges Lula at Mercosur summit

Uruguayan supermarket manager Noelia Romero said in an interview with Portal news agency that sales fell quickly. She says her customers are increasingly taking day trips to Argentina in search of cheaper prices.

“We’ve been hit hard in terms of food and cleaning supplies,” Noelia said. She works in the town of Fray Bentos, which is separated from the Argentine city of Gualeguaychu by the Uruguay River and easily reached by a bridge.

Consequences of “supermarket tourism” in Argentina

Lula BNDES President of the Republic Luiz Inácio Lula da Silva during a meeting with the President of the Argentine Republic Alberto Fernández, Casa Rosada, Buenos Aires Argentina | Photo: Ricardo Stuckert/PR

The growth of “food tourism” in Argentina has led to high unemployment and bankruptcies have been reported in border towns. Therefore, in May, the Uruguayan government introduced economic measures to protect traders in cities near Argentina. The stock package included some tax breaks and rebates on gasoline and medicines.

The President of Uruguay Luis Lacalle Pou, admitted that there is a problem with the low prices in Argentina. He urged governors to introduce a temporary import tax on foreign goods crossing the border.