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Cuba Opens State Wholesale Market to Some Private Businesses

FILE - People shop at the El Egido food market in Havana, Cuba. Cuban state-run media reported on April 13, 2016 that Cuba will open its state-controlled wholesale market to a limited number of private business owners in response to rising food prices that may have angered many ordinary Cubans.

Cuba says it is opening its state-controlled wholesale market to a limited number of private business owners in response to rising prices that have angered many ordinary Cubans.

Without access to wholesale goods, private business have been buying basic supplies in retail outlets and raising the prices to generate profit, leading to widespread hikes in the cost of food and many household goods.

State-run media said Wednesday that food and personal-service businesses that are either cooperatively run or rent space from the government will be able to buy goods at prices 20 percent below retail. They will also be able to do business with state-run importers, a potentially important new benefit that could give access to U.S.-made goods.

The new measures also establish price caps on some goods bought wholesale and sold privately, among them Cuban-produced soft drinks and beer, rum, cigarettes and chicken. State media said the measures would go into effect on May 2.

Under economic reforms that began under President Raul Castro, Cuba has been slowly allowing private enterprise to compete with state-run businesses saddled by decades of inefficiency and lack of investment.

Private businesses have been dramatically outperforming government-run enterprises but charge prices out of the reach of most Cubans, leading to bitter complaints that the country's socialist system no longer serves ordinary people.

Cuba imports most of its food and consumer goods but private and cooperatively run businesses have been unable to import through normal channels, forcing them to depend on informal networks that arrange for Cuban airline passengers to bring hundreds of millions of dollars of good each year into the country in their checked bags.

Granting access to state-run importers could allow private businesses to take advantage of new U.S. regulations that allow American companies to export virtually any product to Cuba as long as its end user is a private business, worker-owned cooperative or ordinary consumer.

State media emphasized the limited scope of the new measure, saying it would only apply to about 4,000 cooperatives and private business renting space in state buildings.

One state official said the government was planning to open three wholesale supply centers for private businesses — in Havana and Trinidad, both major tourist attractions, and in central Villa Clara province.