Cuba Standardizes Store Prices

Cuba Standardizes Store Prices
August 8, 2012
Fernando Ravsberg

HAVANA TIMES — The Ministry of Finance of Cuba has decided to
standardize the prices of 100 basic products — from soap to the chicken
— in all stores that sell in hard currency.

This leveling will mean a sharp reduction in prices; in the case of
chicken breast, for example, it will sell for a maximum of €3.65 per kg,
which implies a reduction of €1.23 compared to what was charged in the
most expensive grocery stores. (1 Euro € = 1.24 USD)

Though all commerce in Cuba is monopolized by the government,
supermarket chains had maintained price differentials. Administrative
ineptitude of some of their managers, employee theft and multas
("commissions") added to products were the main reasons for these
differing prices.

With the action taken by the government it will be more difficult to
disguise the poor management of supermarkets, theft will be limited a
little and any "commissions" being charged will become more apparent.

The latter is a premium that is applied to products, one that ends up in
the pockets of the managers and other store employees. The same stove
could have cost €180 more in one store compared to another, just as the
price differentials on two identical bikes could have ranged from €30 to
€100.

"Commissions" are the most common tactic used by Cuban shopkeepers, but
not the only one. Included among the others are adding water to chickens
before freezing them so as to obtain greater selling weights, tapering
with supermarket scales and punching holes in bags of detergent in order
to steal some of their contents.

State-run warehouses, stores and markets have been the main sources from
which the black market on the island is fed.

Parallel operations in hard currency stores were so lucrative that jobs
were sold for thousands of dollars. People on the island joke that you
can determine how long a person has been working in one of these
supermarkets by the number of gold chains they have hanging from their neck.

Ines Arguelles Gutierrez, the general director of pricing in the
Ministry of Finance, said that hiring policy isn't rigid enough and that
the ministry is continuing to study other products that can be added to
the list.

She added that prices of merchandise will be reviewed at least once a
year to calculate the costs of imports, raw materials and other items.

In this manner protection will remain against price tampering on at
least 100 basic food and hygiene products. Prices can no longer be
manipulated at the expense of the consumer, despite the fact that prices
in hard currency shops will still remain high.

Counting the food that's subsidized (on ration cards) by the government,
in addition to farm products sold in pesos and those products sold in
hard currency, Cuban economists estimate that about €70 per month is
required to cover the median family budget, almost double what the
typical family receives in wages and pensions.

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