The Way to Evade Price Controls

A photo of the menu of one of the private locales that promote a combo of a domestic beer with fried food. (Facebook)

14ymedio bigger14ymedio, Marcelo Hernandez, Havana, August 6, 2019 — It took less than seventy-two hours after the imposition of price controls on beverages in privately owned Havana cafes for their proprietors to find creative ways around them. They involve menu combos that feature a soft drink with an appetizer or a dessert.

On his Facebook page the economist Oscar Fernandez posted a photo of a menu from one such business featuring a Cuban beer and an order of fried plantains for 50 Cuban pesos (or 2 convertible pesos — roughly $2 US), which makes a mockery of the the 30 peso (1.25 convertible peso) mandated price for the beverage.

A similar combo featuring an Hollandia or Heineken also goes for 50 pesos while another combo with a soft drink and dessert at the same cafe costs 25 pesos, well above the official price of 18 pesos for a canned soft drink or sparkling water.

“Two covertible pesos for a beer at a bar (and not just a privately owned one) is a reflection of a hard inequity: there is a segment of the population that can afford to pay that price,” writes Fernandez next to the photo. “The market is like a river. No matter how hard you try, you can’t grab the water with your hands. All you can do is channel it.”

The minister of Finance and Pricing, Meisi Bolaños Weiss, does not see it that way and warns in a tweet that cafe owners “should not resort to tricks to evade pricing regulations.” She added that “complaints and reports of violations should include the date and time they were observed to insure immediate and effective action.”

Since the announcement of salary increases at the end of June, authorities have urged customers to report any privately owned establishment that raises its prices.

“It took just a few days before someone figured out how to work around that restriction,” says Evelio, a regular customer at private pizzerias in Havana. He notes that many of them “are selling what they call a completa, which includes a pizza and a beer or soda, so nothing has changed.”

“I fear that soon it will be very hard to buy a cold beer in this city just by itself, without anything else.” Evelio is not surprised by this new combo fad. “Cubans are used to state stores packaging basic necessities with low-end merchandise and selling it at very high prices for Valentine’s Day or Mother’s Day.”


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