Update: Cuba Opens Zona+ Store- A [Sort-Of Wholesale] Version Of Costco & Sam's Club; Florida Company Proposal Seems Finished


In 2015, Tampa, Florida-based Florida Produce of Hillsborough County, which has exported food products to the Republic of Cuba, proposed to the Ministry of Foreign Affairs of the Republic of Cuba (Minrex) and the Ministry of Foreign Trade of the Republic of Cuba (Mincex) to lease a warehouse of up to 70,000 square feet in central Havana, where food products and agricultural commodities grown, manufactured, processed, and distributed in the United States and then exported from the United States to the Republic of Cuba would be available, on a wholesale basis, to registered independent businesses and Republic of Cuba government-operated entities.  

The Obama Administration supports the proposal.  However, despite numerous meetings and indications of interest, in 2015 and in 2016, no decision has been taken by the government of the Republic of Cuba.  

Now, Republic of Cuba government-operated Cimex has created a business model similar to that proposed by Florida Produce of Hillsborough County.  From an executive of a Canada-based company that exports products to the Republic of Cuba, "If you give them an idea, they will do everything possible to do it themselves- even if that means doing it with less efficiency than if they permitted someone else to do it and then learn from that experience.  This is especially true with anything involving the United States.... They will 'yes' them to the point of exhaustion."

Articles & Images From Reuters and Associated Press

From Reuters (11 July 2016)

Cuba has opened a shop in Havana that could eventually operate as the Communist-ruled island's first wholesale store for the fledgling private sector, offering products in bulk at lower prices than in expensive retail outlets.

So far, Zona+, where produce is piled up to the ceiling like in a warehouse, is offering only a handful of goods in large quantities at slightly discounted rates. Shop employees said that was an experiment.

They said the plan was for Zona+ to sell everything in bulk at a discount, catering in particular to the small businesses that have flourished since President Raul Castro started reforming the Soviet-style command economy.

Officials at CIMEX, the state commercial corporation that owns Zona+, declined to comment and the store manager said he had been asked to give no more interviews, after he told local media the aim was to become a wholesale store. Cuban authorities are often secretive about their economic plans.

"Some products already have a 20 percent discount, not all," said shop employee Ulysses Abreu, 26, pointing to the 2.5-kg (5-pound) tins of tomatoes. "But they are studying whether to sell all products at 20 percent in the future."

One employee, who declined to be named for fear of retribution, said one idea was to offer a 10 percent discount on purchases worth between $500 and $1,000, and a 20 percent discount on purchases above $1,000.

Shoppers at Zona+ said it already had an advantage on other stores because it was uncharacteristically well-stocked.

Cuba's supermarkets are often half-empty and supply problems look set to increase as the government said last week it would cut planned imports this year by 15 percent.

Cuba's new entrepreneurs have long complained that a gaping hole in Castro's reforms is the lack of a wholesale market. Restaurant owners, hairdressers and snack-store owners have to buy their produce in supermarkets at the same marked-up prices as consumers.

The government announced in April that some cooperatives would be able to buy supplies directly from government producers and wholesale outlets for the first time but it did not say the reform would extend to the private sector.

Cuba often likes to experiment with measures before making them official and extending them across the country. Reforms can also be reversed.

Cuba decided at a secretive Communist Party congress earlier this year to eliminate licenses for private wholesale agricultural food distribution.

From Associated Press (11 July 2016)

Cuba has quietly opened a first-of-its-kind store specializing in bulk goods in Havana: Zona +, a high-ceiling space with racks stacked with large tins of tomato sauce, toilet paper and cooking oil by the gallon.

It's not quite Costco, and it falls short of satisfying longstanding calls for a wholesale market to support the growing class of small-restaurant and-cafeteria owners who have set up shop under President Raul Castro's economic reforms begun six years ago.

But it could help relieve the pressure that those entrepreneurs have been putting on other retail stores by snapping up huge quantities of goods, leaving regular customers in the lurch.

On a recent afternoon, Naidi Carrazana pushed a shopping cart loaded with cases of beer, bottled water and soft drinks she needs to stock her small cafeteria nearby. She acknowledged that business owners like her who make big purchases have been emptying market shelves of things like flour, chicken and tomato paste, and said the new store can help with that.

"A place like this allows you to buy in bulk, and that's a benefit for us and a benefit for the people," Carrazana said.

Located in the upscale western suburb of Miramar, Zona + launched a little over a week ago with zero fanfare. Manager Javier Munoz said shoppers are allowed to buy unlimited quantities, but he declined to comment further because he was not authorized to do so by the store's state-run parent company.

Employees said business has been good despite the lack of publicity, as word of the opening spread mouth-to-mouth. One customer showed up in a car and bought 50 3-kilogram (6.6-pound) cans of tomatoes to supply a restaurant.  Similar stores are being planned for other parts of the city, they added.

In Cuba, government entities are the only ones able to import and acquire goods at wholesale, and wholesale access has been a crucial demand of the 500,000 or so small-business owners and their employees, many of them working in the food-service sector.

The government has promised to set up wholesale markets for private entrepreneurs, but that has yet to materialize and their only option has been the same retail stores where the general population shops.

Although goods at Zona + are bulk, that doesn't entail a price break. For example, a kilogram of high-end Serrano coffee costs $14.45 there, while the same kilo was $14.40 on the same day at a regular store elsewhere in Havana.

"The place is pretty, the service is good, but it's still the same price as retail. In truth, it doesn't resolve our problems," Carrazana said. "I hope this is like a seed for a wholesale market where we entrepreneurs can buy at a different price."