On December 21, 2023, Decree of Necessity and Urgency No. 70/2023 (the “Decree 70/2023”) was published in the Official Gazette, which, among many other reforms, repealed Law No. 20,680 on Supply (the “Supply Law”), Law No. 27,545 regarding Supermarket Shelves (the “Supermarket Shelves Law ”), and Law No. 26,992 that established the Price Observatory (the “Price Observatory Law“). Unless further clarification is provided, Decree 70/2023 will enter into force on December 30, 2023.
Decree 70/2023 aims at the “most ample deregulation of trade, services and industry”, through the removal of all restrictions to the supply of products and services, and the repeal of all regulations that distort the price system, or that may hinder private initiative or meddle with the spontaneous interplay between demand and supply. In that framework, Decree 70/2023 has repealed the Supply Law, the Supermarket Shelves Law, and the Price Observatory Law, which we briefly explain below.
Main Aspects of the Supply Law that was repealed
Decree 70/2023 repealed the Supply Law, which was enacted in 1974 and amended in 2014. The Supply Law granted wide-ranging powers to the National government -through the Secretariat of Trade- to regulate the economic activity carried out by companies in Argentina.
Most notably, the Supply Law allowed the National government to fix the price of the products and services in any sector of the economy, as well as to establish the volume or quantity of the products to be sold or commercialized in the country. Furthermore, the Supply Law prohibited “artificial or unjustified” price increases, the hording of products, any business practice that may affect the “normal and ordinary” supply of products without a justification, and the destruction of products.
The Supply Law established severe sanctions for offenders, such as fines, closure of premises for up to 90 days, seizure of products, disqualification to exercise trade and the prohibition to supply the National government for up to 5 years.
Main Aspects of the Supermarket Shelves Law that was repealed
Decree 70/2023 repealed the Supermarket Shelves Law enacted in 2020, which had the objective of regulating the shelf space that supermarkets grant to mass consumption companies, both in brick-and-mortar stores as well as in online sales.
Most notably, the Supermarket Shelves Law created the following obligations for supermarkets operating in Argentina: (i) no single economic group may be granted a shelf space larger than 30% for any product category; (ii) in all products’ categories, there must to be at least five different suppliers; (iii) for every product category, 25% of the products displayed on the shelf must belong to SMEs (small and medium-sized enterprises), while 5% must belong to family-owned, indigenous-owned businesses and workers’ cooperatives; and (iv) the lower price products must to be placed in the middle of the shelf, or placed on the first page if sold through a website.
Main Aspects of the Price Observatory Law that was repealed
Decree 70/2023 abolished the Price Observatory Law enacted in 2014 since “its absolute irrelevance has been demonstrated by the very high inflation” experienced by the Argentinean economy.
The Price Observatory Law created an agency composed by different government officials and consumers associations, with the aim of monitoring prices and the availability of products and inputs, as well as detecting and reporting potential infringements to the Supply Law commented above. Even though the Price Observatory Law was created in 2014, the enforcement authority was only set up in 2022, and had virtually no activity.
Despite the repeal of the laws commented above, it is worth mentioning that the economic activity carried out by companies and individuals with effects on the Argentinean territory continues to be subject to the Antitrust Law No. 27,442, which -in broad terms- prohibits the cartelization among competitors, the abuse of a dominant position as well as certain economic concentrations that have the capacity to affect the general economic interest.
Validity of Decree 70/2023
Article 5 of the Civil and Commercial Code establishes that laws become effective after the eighth day of their official publication; therefore, considering that Decree 70/2023 was published on December 21st, 2023, it will become effective on December 30th, 2023. On the other hand, the treatment of Decrees of Necessity and Urgency (“Decree”) is regulated by Law No. 26122. The regulation establishes that the Chief of Cabinet must submit the Decree to the consideration of the Permanent Bicameral Commission within ten days of its issuance. The Permanent Bicameral Commission has 10 business days to issue an opinion on the validity of the Decree and send it to the plenary of both legislative chambers for its treatment. The Decree will only become ineffective if both chambers reject it.
The Senate and the Chamber of Deputies may only accept or reject the Decree, but may not introduce amendments, modifications, or additions. The decision is made by absolute majority of those present.
