Cuba cuts bulk prices to support private business

Cuba is lowering bulk prices for goods, ranging from marmalade and mayonnaise to tools and CDs, to support newly independent workers and small businesses that lack a wholesale market, official news media said Monday.

The measure addresses a central complaint by many operators of private restaurants, cafeterias and other operations authorised under a wide-ranging economic overhaul launched last year by President Raul Castro.

Under an order from the Ministry of Finance and Pricing, a 1.3-gallon (5 litre) container of cooking oil that used to sell for US$11.50 can be had for US$9.80, labour newspaper Trabajadores reported.

A seven-pound (three kilogramme) container of tomato puree formerly worth US$8.70, now goes for US$7.

"The measure also includes tools and pneumatic and electrical equipment, all with the goal of enhancing sales to independent workers," the article said.

Same prices for bulk orders

Other products like tobacco, alcoholic beverages and bottled water are not covered by the order. Trabajadores did not say when it took effect.

Although the initiative targets private businesses, the same prices will apply for anyone making bulk purchases.

Cuba began allowing increased private enterprise at the end of 2010, issuing licenses for people to launch small businesses and hire employees independently of the state.

The government, which currently employs 80 percent of the labor force, plans massive layoffs although those plans have been put on hold.

Many entrepreneurs have complained about a lack of access to a wholesale market or to credit, as well as high tax rates. Cuba has said it plans to extend loans, but details have not been released.

The government fixes prices and, while some products are heavily subsidized and discounted, many other imported goods go for more than double their value elsewhere.

- AP