By Michela DellaMonica, Contributing Reporter
RIO DE JANEIRO, BRAZIL — While government figures for national inflation hovered around 5.91 percent at the close of 2013, the cost of many everyday items seems to be increasing much faster. According to a recent survey conducted by O Globo, prices at botecos (bars) across Rio increased around fourteen percent since January of 2013.
The survey included research and observations from 35 botecos throughout Rio’s Zona Sul (South Zone), Zona Oeste (West Zone), Zona Norte (North Zone) and Centro. Prices compared were for popular items such as caipirinha, chopp (draft beer), bottled beer, appetizers like bolinho de bacalhau (fried cod balls), steak filé and frango a passarinho (fried chicken).
The staple cocktail of Brazil, the caipirinha, a simple blend of lime, sugar and cachaça had the largest average increase on the menu with prices up by nineteen percent. One establishment surveyed raised the price from R$6 to R$18 in the last year.
“I don’t understand how the caipirinha can be so expensive with such simple and cheap ingredients,” says Rafaela França, a Rio local who lives in Flamengo and feels that the botecos especially in her neighborhood have increased their prices significantly. “It’s hard not to spend R$100 with two people on average each time I go out.”
French fries had an average increase of eighteen percent with the largest price increase of two hundred percent from R$8 to R$26 at one location. Bottled beer had the lowest average increase of six percent, with the most expensive reaching R$10.90. The codfish balls rose eleven percent, with only three out of the 35 establishments surveyed keeping the prices the same.
“I knew Rio wasn’t a cheap city but I wasn’t expecting the prices to be this high, even though the exchange rate is in my favor, things are still overpriced,” says Cat Rainey, a British tourist who has been in Rio for a few weeks and spoke to The Rio Times.
Concern about the high prices was presented to the board of the Association of Hotels, Bars and Restaurants (SindRio) this month. The organization’s president, Pedro de Lamare, said that a system is being studied to collect monthly information on the prices of products and services and communicate it to consumers.
Lamare told O Globo, “There are many “villains” [driving up] the price, but it is not good just to name the villains. We want to assemble a structure to collect industry data, understand what is happening and how to communicate to consumers in the best way, which may influence the price chain.”
In an effort to explain which factors are driving the botecas to increase the prices, so significantly, so quickly, he said, “Outside of historical issues, such as labor, last year we had an increase of about ninety percent in commercial rents in the city, mainly in Centro and in the neighborhoods of Zona Sul. Also, spending on administration fees and cards credit and debit cards now account for 5.3 percent of business sales.”
A separate survey of fifty services was conducted by the Fundação Getulio Vargas (FGV) concluding that inflation was an average of 1.69 percent in just the first two months of 2014. The research covered Consumer Price Index services such dining out, school tuition, transportation and medical services, the most alarming increase was for meals and dining out – 9.97 percent.
President Dilma Rousseff’s response to this and to the announcement made by the Brazilian Central Bank in January that a six percent inflation is expected in 2014, is that she is striving and making it a top focus to contain the high inflation rate.