August 29, 2013

U.S. food exporters look forward to competition in Cuba

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Alimport, Cuba’s state-run food purchasing agency, has always been on a tight budget. As such, it’s traditionally made most of its deals with U.S. food exporters in the form of bulk farm commodities ranging from dry beans to frozen chicken.

However, if President Raúl Castro’s next round of reforms includes the liberalization of food imports, future decisions on what gets into Cuba could be made by local businesses not Alimport.

That would make Mohamed Bouras happy.

Bouras, owner of Bouras Global Trading in Ft. Lauderdale, FL, headed international sales at Indianapolis-based Marsh Supermarkets during the early 2000s. At the time, Marsh was the first American company to sell U.S.-brand, supermarket-friendly packaged food products into Cuba’s so-called “dollar stores.”

In 2002, Marsh contracted to sell Cuba 750 tons of butter, baby food, cookies, condiments, pasta, paper products and other items worth around $750,000. But in recent years, Marsh hasn’t had much luck with Alimport.

Meanwhile, Bouras moved on to set up his own food export operation, supplying diverse markets including Chile, Panama, Venezuela, Hong Kong, Japan and the Middle East.

Monitoring Cuba’s recent wave of economic reforms, Bouras sees opportunities on both sides of the Florida Straits if the island’s emerging entrepreneurs are allowed to negotiate deals directly with U.S. food suppliers.

“We will happily consolidate mixed 20-foot containers for them, just as we do for other current clients. We do this on a regular basis from my warehouse in Ft. Lauderdale,” Bouras told CubaNews, noting that a small business may want to order a 20-foot or 40-foot container load of mixed packaged food and other supermarket items.

He said that various Florida-based outfits such as his already handle that kind of business with nearby countries like the Bahamas, Haiti, Jamaica and the Dominican Republic.

US-Aruba Exports Co., a food trader based in New Port Richey, FL, that ships popular brands like Coca-Cola, Canada Dry, Nescafé, Mott’s Apple Juice, Tropicana, Gatorade and Bumble Bee tuna, says the same.

“We would be interested in exporting packaged and canned American food products to Cuba, provided we are able to obtain the required export license from the U.S. government,” said export manager George Wong.

With Alimport controlling the arrival of food imports into Cuba, said Bouras, the government determines the cost of any item found in Cuban supermarkets.

And that often translates into inflated prices, even by American standards.

While prices for various imported foods were already considered high enough, competition for such sales among these small businesses would introduce a new concept to Cuba’s retail market: discounts.

Indeed, if smaller Cuban entities are able to purchase goods from South Florida suppliers at a low enough prices, they’d pass the savings onto their customers in the form of sales.

“I think this will be the beginning of a market economy in Cuba,” Bouras told us. “Competition among retailers and wholesalers will benefit the consumers, after all. It will be a healthy environment. Prices will definitely come down from current levels.”

He added that Alimport marks up supermarket prices by as much as 240%, but that even in a future liberalized scenario it would not be out of the picture altogether. That’s be-cause it will likely continue to be in charge of supplying food for Cuba’s tourism industry.

“I believe that potential private importers and distributors can co-exist in the Cuban economy alongside Alimport, and not necessarily replace or compete with it,” he said.

One Florida food trader who may not agree with Bouras is Richard Waltzer, owner of Ft Lauderdale-based Splash Tropical Drinks.

Through a series of deals with Alimport, Waltzer has built a lucrative business supplying the island’s hotels and resorts with daiquiri and margarita drink mixes.

When asked about any future broadening of Cuba’s food import sector, the businessman politely told CubaNews “no comment.”

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