Alert Sounded in the Informal Market

Alert Sounded in the Informal Market / 14ymedio, Rosa Lopez
Posted on September 5, 2014

Unauthorized vendors welcome new customs regulation with caution as they
prepare to redefine strategies

14ymedio, Rosa Lopez, Havana, 3 September 2014 — "Call me from a land
line" instructs the classified ad placed by Mauro Izquierdo, vendor of
electrical household appliances. He has a wide range of items on offer,
from air conditioning units to toasters, but his specialty is
flat-screen TVs. This morning, his cautious response to all callers was:
"Right now I'm in the midst of redefining my pricing structure until
everything settles down with the new customs regulations."

Mauro is but one strand in the complex tapestry of unauthorized vendors
who are living through anxious moments with the new restrictions imposed
by the General Customs of the Republic. Price increases are imminent in
the black market, given that a good part of the merchandise offered
through its networks enters the country via the flight baggage of
so-called "mules." "I have ceased all operations for the time being,
because I don't know if I will get the accounts with new prices that
have been imposed on the airports," the able merchant confirms.

His clients also have been preparing for the increase."I'm finishing
construction on my house and I had to run to buy lamps, bulbs and
bathtub plumbing for the bathroom, because all of that might become
unavailable very soon," said Georgina M., looking to the future, as she
concludes construction on a new residence in the western township of
Candelaria.

14ymedio contacted approximately 20 vendors offering merchandise on
classifieds sites such as Revolico and Cubisima. Although
previously-listed products remained at their advertised prices, any
orders going forward would come "with with new tariffs added to the
price," according to various distributors. Last week, Leticia was
offering hair dryers, massage machines, and hair removers. However, now
she is planning to raise prices by about 20 or 25 per cent on each
product so as to be able to "finance the payments that those who bring
the items into the country must make at Customs."

The advance notice given of the new rules has allowed many people to be
prepared. Rogelio, a Panataxi driver who makes trips from Terminal 2 of
José Martí International Airport, refers to how even "two days before
the new restrictions went into effect, what people brought was
incredible — suitcases upon suitcases." Even so, he noted that since
yesterday, "travelers seem more cautious and, among those I have
transported, I have seen a decrease in the amount of baggage they're
carrying." Another taxi driver joined the conversation, saying that
"people have now been made to jump through hoops."

Even so, for other alternative vendors, the new measures barely affect
their supply chain. "I buy space in the 'containers' of people who are
on official missions, working in the embassies and consulates throughout
the world, and that is how I bring in my merchandise — therefore the new
rules don't touch me," boasted a seller of lawnmowers and commercial
refrigerators, who enhances his ads with attractive photos of each unit
and the guarantee that it's "all done with proper documentation."

It is still too early to measure the true impact on the informal market
of the new customs rules, but sellers as well as merchants are preparing
for the worst.

Translated by: Alicia Barraqué Ellison

Source: Alert Sounded in the Informal Market / 14ymedio, Rosa Lopez |
Translating Cuba -
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