Joining Forces to Guarantee Food Supply
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Joining Forces to Guarantee Food Supply

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Jan Hogewoning By Jan Hogewoning | Journalist and Industry Analyst - Thu, 04/02/2020 - 10:31

In a video conference meeting with 12 regional managers of DICONSA on Wednesday, the director of SEGALMEX, Ignacio Ovalle, stressed the importance of maintaining the lowest prices in the market for food and other items sold at DICONSA stores. He also confirmed that DICONSA’s 300 warehouses were now sufficiently stocked, after a mass purchase by SEGALMEX of 20 products last week. “The work of DICONSA, LICONSA and the Guaranteed Prices Scheme are considered high priority and cannot be disrupted,” he stated. To ensure this, he pleaded that all working personnel follow the rules of hygiene and keep a healthy distance. The objective is to maintain sufficient supply of food for marginalized and low-income communities during this critical period when COVID-19 is leading to panic purchases and potential disruptions in food supply chains. The director also pointed to the importance of keeping track of available stock at points of sale to avoid more wholesale purchases that may cause the reselling of products.

The tracking of sales and inventories is extra relevant given the revelation that during the last year of the administration of Enrique Peña Nieto, US$83 million of the total budget for LICONSA was unaccounted for or spent on unjustified accounts. The 2018 Public Account report released by the Federal Auditing Agency (ASF) pointed to different malpractices such as overpricing, phantom purchases, lack of control in the distribution of goods, uncollected debts and illegal contracts. In addition, LICONSA could not account for US$60 million for the transports of merchandise and products for agriculture, forestry and food purchased as raw materials. LICONSA also received US$8.4 million for a marketing campaign with the slogan “LICONSA, the milk that strengthens Mexico.” This expenditure, however, was not included in the federal budget of 2018.

Similar issues were reported during a 2018 ASF investigation into DICONSA, where it was found that malpractices may have led to a loss of US$34.8 million. Storage, container and packaging activities reported an expense of US$10.4 million but only proved expenses for US$8.7 million. The ASF asked DICONSA to carry out an internal investigation into its public officers, who during the year 2018 failed to report the remaining expenses to the federal Tax Administration Service (SAT). LICONSA and DICONSA were both under the direction of Ministry of Social Development (SEDESOL) at the time. SEDESOL has since been rebranded as the Ministry of Well-being (Bienestar), while LICONSA and DICONSA have been placed under the Ministry of Agriculture and Development (SADER).

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