Small and medium-sized private businesses (MSMEs) that are not willing to accept the Cuban government’s new rules are liquidating their inventory and going out of business.
14ymedio, Natalia López Moya, Havana, 11 December 2024 — Cookies, soft drinks and bouillon cubes are some of the items on a list that is making the rounds from cell phone to cell phone in Havana’s Sitios neighborhood. In a WhatsApp group, local residents inform each other of the new clearance prices of these products in a nearby privately owned store. “Buy now. This is the last month the store will be open,” reads the text.
The Official Gazette recently announced a resolution that prohibits micro, small and medium-sized enterprises(MSMEs) from selling wholesale merchandise without state involvement. It also prohibits self-employed workers from doing any wholesale transactions, a move that has caused many small privately owned shops to either liquidate their entire stock to comply with the new law or to shut down permanently. “We don’t import but we do buy from a couple of private companies that do — always through a state intermediary — which saves us from all the paperwork of bringing the products in from overseas,” says Pablo, who owns a small store near Carlos III Avenue.
Pablo, an alias this businessman uses to avoid retaliation, began selling off his merchandise in early November after learning that new measures would soon take effect. “I only have a few items left so we are doing an end-of-year sale and offering discounts to clear everything out before December 20. We will not be open at Christmas and by 2025 we won’t even be in business anymore,” he explains.
“I only have a few items left so we are doing end-of-year sales and offering discounts to clear everything out before December 20
Pablo says that he has two main suppliers, “an MSME that imports frozen foods such as chicken, ground beef and pork from the United States and another that imports detergent and soap as well as shelf-stable foods from Mexico.” Going forward, both companies will not be able to sell this merchandise wholesale to small private retailers. “Now we are supposed to buy from the state but I do not do business with the state, he says.”
Pablo’s distrust comes from having worked for more than two decades at an affiliate of Cubacontrol, a state-0wned company that oversees many of the island’s commercial transactions. “I was an insider and I know how things work at those places. What will happen is that everything will become slower, more difficult, more bureaucratic and that’s really not for me. My wife and I started this business because we wanted to improve our lives, not give ourselves heart attacks.”
A well-stocked store on Central Havana’s Reina Street that used to sell soft drinks, beer and wide variety of knick-knacks has also been closed for a week. Local residents tell would-be customers looking for the place that it has gone out of business. “They closed and sold off what they had left,” says a retiree who is disappointed by the owners’ decision. “The lady who rented them the living room in her house loses that income. And now when you want a smoke or a cold drink, you have to walk further to get it.”
Private businesses that sell food are not the only ones affected by the new measures. “Buy the whole lot. We are having a clearance sale,” explains an ad from a small company that sells wholesale ceramic tiles. “Spanish ceramics. Big discounts if you buy the whole lot, which includes all documentation from [the port of] Mariel. Everything above board. We are not making a profit. We want to clear out our stock before the end of the year.” Several rows of boxes with tiles in different sizes, textures and colors can be seen in the accompanying photos.
“Spanish ceramics. Big discounts if you buy the whole lot, which includes all documentation from [the port of] Mariel
Other construction material suppliers are also selling off their inventory in order to comply with the new regulations. Henceforth, they will be required to buy wholesale from state-owned companies acting as middlemen. “We didn’t have much left in stock because these past few months have been challenging. Almost no new merchandise came in. We’ll see how things go under this new law before closing down for good and then get a different business license to deal with the new conditions,” said the owner of a business that sells cement and tools as well as kitchen and bath plumbing fixtures.
For someone named Raúl Rojas Leiva, having the state act as middleman is a recipe for disaster: “If Cuban distribution companies have so much transportation, infrastructure and commercial experience, why don’t orders arrive on time? Why do these distribution companies sell almost nothing? And I mean nothing,” he asks on the local government’s official Facebook page, which officials in Havana launched in hopes of convincing businesspeople of the new resolution’s benefits.
“Big clearance sale on footwear for men, women and children. Don’t miss out. Don’t say we didn’t warn you,” reads an ad from another MSME, this time in Havana’s Tenth of October district. “It’s all quality merchandise, imported from Panama and currently worn round the world. No old models,” the vendor states. Unlike other store owners who are hoping to stay open under the new legislation, she is taking a more drastic approach. “We are going out of business because our supplier says that he will no longer be able to sell to us wholesale.”
In the case of this shoe store, the closeout also includes the house where the merchandise is displayed. “If you want to buy a two-story house near Santa Catalina, this is your best option. The ground floor is configured to accommodate a business, which is currently a shoe store but can be renovated to house a hair salon, spa or a small grocery,” writes the seller, who adds, “Stay tuned on our WhatsApp channel because we will be getting rid of everything, including the mirrors.”
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