Miguel Calvete, CEO Chinese Supermarket Federation (FESACH)Sunday, February 23, 2014
‘The meat boycott was more symbolic than effective’
Born: April 5, 1965
Position: CEO Chinese Supermarket Federation (FESACH); President of the Mass Consumption Studies Institute (INDECOM)
Education: Law at National University of Lomas de Zamora; Masters at Complutense University of Madrid
Newspaper: Ámbito Financiero, Clarín, Página/12
Currently reading: Estoy verde by Alejandro Bercovich, and Inferno by Dan BrownThe grandson of a Spanish convenience store owner himself, Miguel Calvete’s current role seems an obvious one: he’s the CEO of the Chinese Supermarket Federation (FESACH), which groups together 11 separate chambers and close to 11,000 individual Chinese-run conveniences stores which, combined, employ around 30,000 Chinese and 50,000 Argentines. Calvete sat down with the Herald at his office in downtown Buenos Aires City to talk business and dispel some of the myths surrounding the phenomenon that is Argentina’s Chinese-run supermarket sector.
How to you assess the “Price Watch” programme so far?
Unfortunately, there were a few shake-ups with the dollar that generated speculation within many companies across the board. The programme’s not yet at the stage it should be. There are still cases of a lack of products, the lack of delivery of products, speculation from within certain sectors of the industry — distributors, wholesalers, supermarket chains — but not small businesses, like those of our members. They don’t have the ability to hoard products, so it’s impossible for them to speculate. Unlike the big chains, which absorb around 60 percent of everything that’s sold. Our sector accounts for just 18 to 19 percent. “Price Watch” is not going to be easy, it’s not going to do away with inflation. What it does is minimize the speculation that exists over prices. We’ve told the Domestic Trade Secretariat Augusto Costa, Economy Minister Axel Kicillof and the Cabinet Chief Jorge Capitanich — we have almost weekly meetings — that the government needs to take complementary economic measures to lower the outlook for inflation.
Last week you seemed to take action into your own hands on price speculation with a boycott on meat products.
Around 70 percent of the butchers that are located within our supermarkets are rentals, another 30 percent — or around 3,500 butchers — are run by the supermarket owners themselves. We called a meeting on Wednesday last week with owners to discuss meat prices, which in some cases rose 25 percent, and decided we’d boycott certain wholesalers. At the beginning of this week, there was a slight drop in prices, around 10 percent. But they’re still not down to what they should be. It was really more symbolic than effective. If the big supermarkets had boycotted there would have been a different outcome, prices would be where they should be.
Toward the end of last year, activists called attention to the significant mark-ups and underhanded sales techniques surrounding products that were nearly identical to those in the 2013 government price deal. Can the current “Price Watch” programme, in practical terms, last the year?
It’s going to be difficult. We really can’t make any assessments based on January’s inflation data, and February’s is also going to be high because of the recent devaluation. We think inflation is going to round off for the year at 30 percent, which is high for a country that produces and exports food. If, in Venezuela — a country that doesn’t have a large prime industry — inflation is at 50 percent, ours is really very high. The outlook is complicated. Undoubtedly wage negotiations are going to have an impact, and nothing alone — including “Price Watch”— will solve inflation. Inflation is dealt with taking confidence-building economic measures.
And from your perspective what would those be?
Putting an end to the hyper-concentration that exists in the food industry. Eighty percent of food in this country is produced by 25 companies and the other 20 percent by more than 15,000 small- to medium-size companies. We need greater production. How? These smaller companies in the sector — in whichever sector, really — need greater access to finance to offer better training without the added labour costs, access to subsidized machinery imports to produce more, and greater emphasis on regional economies. We also need to lower the IVA (goods and service VAT) on certain products, while optimizing the use of subsidies. That’s to say, fewer subsidies for individuals and more for producers.
Under what circumstances would you pull out of the price agreement with the government?
We’ve spoken to the Domestic Trade Secretariat about this. All the chambers agree that if wholesalers can’t guarantee their prices, then we’ll leave the agreement because we’re certainly not going to be able to maintain our own.
On a personal note, how does a non-Chinese person become CEO of a Chinese supermarket federation?
The president of a Chinese chamber is hardly ever Argentine; that’s a tacit demand on the part of the Chinese. But since our chambers are divided into certain ethnicities or sub-groups and each has its own president, it makes sense that the CEO is not Chinese, as that person then takes on a more conciliatory role. This is why the federation has worked so well.
Has this organizational model helped remedy the poor relationship the Chinese once had with Argentina’s traditional convenience store sector?
Yes, without a doubt. I worked for three years on integrating our federation into the bigger industry federations, and proving to local vendors that the Chinese weren’t a threat, and that the big commercial chains are the ones that are going to take money from you — not the Chinese. The traditional stores have recognized this now, after having almost collapsed in the 1980s. Had it not been for the Chinese opening up around that time with a similar format, the traditional stores would have disappeared. People in the sector tell me that today.
Do your members report much racism here?
In 2001, when there were barely 2,000 supermarkets here, 289 were looted — a huge proportion of stores. We’ve achieved some degree of integration but there’s always the odd case of racism; it’s a long process. The Chinese are physically different, and that creates a space for racism, unfortunately.
One of the many rumours that has surrounded the Chinese supermarket sector is that some vendors turn their freezers off at night. Is that true?
There were cases of that happening. But around 90 percent of our members have now installed temperature monitoring systems, and producers are helping push for this to become law in several provinces. We’re the most criticized sector for allegedly turning our freezers off, but we’re the only one that’s pushing for legislation to avoid it.
And their connection to the Chinese mafia?
There are groups of people that try to extort money, but no mafia. In fact, the Chinese Police are present in Argentina and since they arrived a lot of problems have been eliminated. Of course, we’re subject to a lot of crime — just like kiosk owners — because of our proximity to crime hot spots. That includes armed robbery and homicides. I’d say we have one homicide in the Chinese supermarket sector every 40 days, which has nothing to do with the murders within the Chinese community. That’s all very cinematic. When a García kills a López you don’t hear anything about the Spanish mafia. When a Jones takes out a Smith, there’s nothing said of the English mafia. But when a Ling kills a Chen, people automatically believe it has to do with the Chinese mafia.