Hyperinflated Arepa Index (HAI) XIII: Soviet-Style Inflation

April 13, 2016

arepaplot

Six weeks ago I went to Caracas and had my arepa de queso de mano and to my surprise, the price did not go up at all. Surprise, because everything else seems to have increased dramatically this year. In fact, I went to the Chacao free market too and the typical Venezuelan cheeses I love, had gone up quite a bit, between 20-30%.

Thus when I went back last week I was not only expecting the price to go through the  Bs. 1,000 barrier, but I was expecting it to go much higher then the Bs. 1,100 I was charged. In fact, I go during the week for lunch to a different arepera which is cheaper, but this time it was more expensive. At Bs. 1,100, the price rose by 15.7% in two months and the 12 month increase was the highest ever at 486%.

Since I began in November 2014, the arepa has now gone up almost by a factor of ten.

I was so eager to eat the arepa, that it was not after I took the first few bytes that I realized something was different: The arepa was smaller, it was thinner, had a smaller circumference and less cheese inside. What the arepa was seeing was Soviet-style inflation, since in the old days of the Soviet Union, products would seldom rise in price, but will simply shrink to keep inflation low.

Sort of like this, although it is an exaggeration:

arepita

arepita

It is unfortunate that I did not notice the change (I don’t find out the price until I pay) or I would have taken a picture and compared with the one above taken earlier. I promise to take a picture next time and show you the evidence.

This makes total sense from a competitive standpoint. As inflation has soared, the price of an arepa is becoming too expensive for large segments of the population. Thus, keeping prices low by shrinking the arepa is certainly going to drive traffic in.

Depressing, but true!

35 Responses to “Hyperinflated Arepa Index (HAI) XIII: Soviet-Style Inflation”

  1. Rafael Vicente Lozano Moreno Says:

    Diablo, y no hemos visto lo peor, las empresas están paralizando lineas y dejando de fabricar los productos, por la sencilla razón de que no hay Materias Primas, o Material de Empaque. Lo de la arepa ya lo estamos viendo en los productos como los: Yogur, Jabones de Tocador y productos de aseo del hogar.

  2. M Rubio Says:

    Prices are crazy here too, going up every week. Eggs will soon break the 100 bs barrier. Sold my last egg “detallado” today at 70 bs.

    I’ve noticed the 2 bs note are no longer in circulation and I’m sure the 5 bs notes aren’t far behind. Not too many months ago the largest bills the school kids had on hand were 10’s and 20’s. Today it’s almost all 50’s and 100’s.

    What I bought at the local Chinese market for 60.000 bs a year and a half ago required my Ford F350 to haul. Today I could ride a bike with 60.000 bs worth of merchandise…..all of it in a plastic bag.

    There seems to be no end in sight.

  3. Bill Says:

    i need to share this! I came here last week after 7 months in the states. I brought 4 suitcases full of food. On the outside of each was a colorful sign that said “Going to Venezuela. The people are starving!!!! this is Food Vitamins and Health products”. Each suitcase was over 60#. Flying first / business I was allowed 3 free and the 4th was $200.00. The Gent at the Alaska Airlines asked what was this and i explained. This was Food, Vitamins and Health care. (Soap, Shampoo, Deodorant, Bandaids, Neosporan and the likes.) The Kindly Gentleman from Alaska Airlines said he could not charge for the extra bag as it was not correct for a company to profit from supplying aid. God Bless Him!

    I arrived in Maracaibo and the Jefe of Aduana said i could not bring this much into Venezuela. Rice, Beans, Pasta, Tuna and other canned goods. I told him that last year here in De Candido they would not sell to me because i was a Gringo and did not have a Cedula. I said surprise “Gringos eat also”. They let me go without bribes or sharing the product.

    I am leaving tomorrow after distributing 110 KG of supplies to friends and family. A very uneventful session with PDVSA trying to collect invoices 19 months old.

    • Dr. Faustus Says:

      Many thanks for sharing that! What? PDVSA didn’t pay? Perhaps they’ve run out of money? How can this be? With the largest petroleum reserves on earth? Strange. Very strange.

    • Paul Says:

      This reminds me of a funny story from a few years ago. I was travelling from the US to my place in PLC and went through Maiquetia with a couple of bags. As usual, I brought some of the food from the US I like to have on occasion. At that time, the shortages were nothing like now. A very rojo Chavista customs lady decided to check my bags and then scornfully commented, “What, you think we don’t have food here in Venezuela?”

      I just smiled….still smiling.

    • M Rubio Says:

      I’m still trying to imagine the shock to one’s body of being in Alaska one day and Maracaibo the next.

  4. cesargrauf Says:

    I remember during Carlos Andrés Pérez II, or Caldera II, something like that happened to the “pan francés”, a roll of bread, kind of like an individual baguette that is very typical of Venezuelan panaderías. The price of each roll of pan francés was regulated, so it got progressively smaller until I had to make maybe 3 or 4 sandwiches just to have enough for lunch!

  5. Ira Says:

    We discussed this in a prior arepa price index article:

    That you should bring a small scale, like the drug dealers use, to weigh them!

  6. Lee Kuan Yew Says:

    People notice such things, the size of the arepa or plate they get. So unless they get funky money from somewhere.. how do they even survive a week with minimum salaries? Beats the heck out of me. Surely many people are forced to eat less, or even go hungry sometimes. And many others start eating only cheaper food, less nutritious, less protein, more empty carbs and sugars. So even eating less, the population tends to get fatter, more obesity, and their health declines for malnutrition, lack of vitamins.. They are probably eating lots of pasta, and the arepas with cheaper cheeses or bad quality hams, no more good carne mechada or fancy reina pepiadas? I wonder if they can still afford those delicious empanadas de cazon in Margarita.. I too would pay half of my salary for a few of those right now..

    • Alexis Says:

      I know people who typically eat once per day, and their diet essentially consists of starches (potatoes, rice, yuka, etc.).

      The typical Venezuelan diet has always been terribly unhealthy (awfully far from the recommended 9 portions of vegetables and fruits per day), but this is reaching sub-Saharan conditions.

    • Dee2 Says:

      They eat ketchup sandwiches…. Bread, ketchup and parmessan sprinkled on top. Close your eyes and imagine a pizza

  7. Dee2 Says:

    Same crap here in SoFla. Plenty of examples in Doralzuela where portions are shrinking as merchants strive to stay profitable while staying competitive.

    • Ira Says:

      True, but there’s a big difference between reducing portion to maximize profit and reducing it because you don’t have the stuff.

      Also, it’s cyclical here. Companies do this…consumers react…and then companies have to do that. Competition keeps it in check.

  8. moses Says:

    Like the ever shrinking rolls of toilet paper ?

  9. Dr. Faustus Says:

    Bocaranda is reporting tonight that Finance Minister Medina is/was meeting with the IMF and World Bank in Washington. F-Rod arranged it. Who approved this? Does the right hand know what the left hand is doing? Panic may be just around the corner.

  10. Ron Larson Says:

    We have the same problem in the US. We have a name for it. It is called “Grocery Shrink Ray”.

    The Consumerist (Part of Consumer Reports) does a good job of tracking this dirty trick.

    https://consumerist.com/category/grocery-shrink-ray/

  11. Yngvar Says:

    This post made me hungry. Think I’ll get an arepa just about now.

    Sucks to be you, Venezuelans. Bed and lay and all that chums.

  12. mercedes atencio Says:

    My kingdom por una arepa de queso de mano!

  13. Arco Says:

    bought 10 packages of arinapan at 4500bsf.
    Also saw a pot of Nutella at 27.000bsf, thats 27$ for chocolate creme. Did not buy that one since I’m going to holland next week where nutella costs 3$.

    roundtrip caracas – curacao = 100$

  14. nacazo Says:

    Soviet style? Zimbabwe style….


  15. […] Hyperinflated Arepa Index (HAI) XIII: Soviet-Style Inflation, Miguel Octavio, The Devil’s Excrement […]

  16. Blackburn LeBlack Says:

    Something like this, Miguel? https://twitter.com/NituPerez/status/724391962271469568

  17. Blackburn LeBlack Says:

    Don’t know if the post was logged so here again:

    Is this something similar, Miguel? https://twitter.com/NituPerez/status/724391962271469568


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