Monday, June 25, 2012

835. Cuba Bids Farewell to Tax-Free Food Imports

People waiting at Havana airport
The ending of tax-free  import to Cuba saw an increase in
excess luggage at Havana Airport
By Sarah Rainsford, BBC, June 24, 2012

Havana--The arrivals areas at Havana Airport's Terminal 2 have recently been crammed full to overflowing.
Cuba has just re-imposed customs duty on all food imports. Families and businesses have been scrambling to get supplies onto the island before the cut-off date.
On the final tax-free day, the number of charter flights from the US was doubled to 22.
Airlines had to lay on 10 additional planes just for the excess luggage and most of that, according to a senior airport official, was food.
In 2008, passengers were permitted to bring food into Cuba duty-free for non-commercial purposes.
It was a temporary measure intended to allow families to receive food aid from relatives abroad following a series of devastating hurricanes, but in a country of shortages it was soon being used to turn a profit.
A Cuban-American man calling himself Eduardo explained: "At the start, I used to bring things over for peoples' relatives. Small parcels. What I bring now is for businesses."
He says he flies in from Miami every fortnight, and he describes himself as one of a large number of couriers, known as "mules", who work for agencies sending everything from money to food to Cuba - mostly from the United States.
'Uninspiring and unreliable'
While commercial imports are not allowed, the government recently authorised a limited expansion of the private sector.
The new businesses that have sprung up, such as the hundreds of house-restaurants, or paladares, have come to rely on the mules to supply them.
"I pay $130 (£84) towards my ticket and the agency arranges it all," says Eduardo.
The short flight to Cuba would normally cost over $500.
"I carry 20kg (44lb) of luggage for them and I have other clients of my own who request things I can bring in my hand luggage," he says.
Miguel Angel Morales restocked his paladar in Old Havana just before the rule change
But Eduardo is sure things will change now that food imports are again subject to duty, by value and weight.
"We won't bring food any more. It weighs too much, it won't be profitable," he says, describing cash and clothes as more viable.
Cuba's new, private restaurateurs are worried.
There is no wholesale market and the stock in state-run shops is severely limited, uninspiring and unreliable - largely down to the trade embargo imposed on Communist Cuba by the US.
So the "mules" have been filling in the food gaps.
"It's a way of life here. People live off things sent from abroad... people are very worried," explains Mexican restaurant owner Angela Hernandez.
The spices she needs are not available here, so she orders them from Mexico and Miami.
"I have spices in stock for now but I need to figure out how I'll get them when they run low - or drop the dishes from the menu."
Another paladar boss restocked his kitchen just before the rules changed.
"We bought spicy sauces, cheese - things you can't get here, or that disappear very quickly," said Miguel Angel Morales, at La Moneda Cubana in the tourist heart of Old Havana.
"I brought a lot more than usual: sweetener, fine salt - things that last," Mr Morales said, adding that his sister delivered all the goods, from Miami.
"I'm panicking!" admitted Tomas Erasmo, a former chef to Fidel Castro who recently opened his own stylish paladar.
He has travelled abroad regularly to buy items impossible to find here, like the dried mushrooms rehydrating in his kitchen.
Still, the chef believes the broader population will be harder hit than the restaurant trade by the rule change.

Tomas Erasmo said his paladar needed ingredients from abroad, but he did not make use of mules "Some people have been using the import system for commerce, breaking the rules, and the state is losing out on sales so yes, I think the mules should be taxed," the chef says.
But he describes those mules as embargo-busters, taking hard-to-find food to people across the island, door-to-door.
It's not legal, and while Mr Erasmo doesn't buy it, many others do, drawn by lower prices and infinitely better choice than in state-run stores.
For others, the tax-free imports still serve their initial, humanitarian purpose.
"People bring in food for their families too," Mr Erasmo argues.
"They have needs, and until the state can resolve that problem I think we should be flexible."
At Havana Airport's Terminal 2, just before the rule change, most passengers agreed.
They poured through the arrivals gate, trolleys piled high with luggage, many carrying plastic-wrapped holdalls, clearly marked: "FOOD."
"I brought things you can't find here, like this big rich cake," said Blanca, a Cuban emigree arriving to visit her mother.
"They should know who's coming to see family and who comes often, and to sell," she complained.
"Eduardo" the mule is confident the business supply route will be resolved eventually, albeit at higher prices.
But some families feel they've lost a lifeline.
Delia, who was visiting relatives in Havana for the first time in 12 years, said: "Maybe some people are doing business, but we're bringing food for our families.
"And with the problems they face here, that's a big help."

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