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Supermarket Sales Should Increase With Closer Monitoring Of PAN Benefits
Family Department will ensure that 100% of funds are spent on foods that require preparation
By TAINA ROSA
July 31, 2003
Effective Aug. 18, participants in the federal Nutritional Assistance Program (PAN by its Spanish acronym) will only be able to spend their benefits on foods not already prepared. This means PAN funds that were once spent inappropriately will end up in the cash registers of supermarkets and colmados, which should increase their sales by up to 15%, according to some supermarket executives.
Gretchen Coll Marti, administrator of the Family Departments Family Socioeconomic Development Office (ADSEF by its Spanish acronym), told CARIBBEAN BUSINESS PAN funds were always supposed to be spent entirely on nonprepared food items. However, some beneficiaries were using part of the funds to buy other products, even nonfood items.
Coll Marti said that up to 25% of the funds, which could be withdrawn from any ATM / ATH machine, were being used to buy nonfood items, even though the Family Department has provided instructions for the funds proper use. Some retailers were facilitating this misuse of funds by accepting the card as payment.
"The problem was that beneficiaries received PAN funds and other unrelated benefits through one card [dubbed "La Tarjeta Unica"], with which they could retrieve their benefit money from any ATM in any store," said Coll Marti. She noted PAN funds were being used to buy automotive parts, clothes, and other nonfood items.
"Now, we are depositing all PAN funds into a separate card, which we have programmed so it can only be used for food," said Coll Marti. Additionally, the card will no longer be accepted as payment in unauthorized establishments.
However, 25% of the funds can still be cashed out at any ATM / ATH. Coll Marti said this is still allowed in fairness to smaller authorized retailers that might not be able to afford the ATM / ATH technology. PAN beneficiaries can pay for their items with cash at these stores.
This is good news for local supermarkets and colmados. Roberto Mendez, president of Mi Casa Supermarkets, said he expects the move to increase sales by 10% to 15%. Astrid Aponte, marketing manager of Supermercados Grande, also looks forward to a sales boost.
Coll Marti said PAN is the federal program that most benefits Puerto Rico; each year the island receives $1.3 billion in PAN funds. She added that 416,500 families, or about 1.5 million people, are PAN beneficiaries.
This Caribbean Business article appears courtesy of Casiano Communications.