- Title: Costco in Caracas: how Florida goods flood Venezuelan stores
- Date: 16th December 2019
- Summary: (SOUNDBITE) (Spanish) STORE OWNER, EDGAR PINTO, SAYING: ''People are blown away when they see a large Pantene (large shampoo bottle) that we had not seen for the past 5-6 years in the country and that is what most people purchase when they are dazzled. The first thing people do when they walk into the store is get blown away and say 'Wow, I remember this from eight years ago.''' CUSTOMER TALKING TO EMPLOYEE CUSTOMER PAYING WITH DOLLAR NOTES CUSTOMER LOOKING AT PRODUCTS ON SHELVES STORE EXTERIOR FELIPE CAPOZZOLO, HEAD OF CONSECOMERCIO CHAMBER OF COMMERCE BEING INTERVIEWED (SOUNDBITE) (Spanish) FELIPE CAPOZZOLO, HEAD OF CONSECOMERCIO CHAMBER OF COMMERCE, SAYING: ''The country has no dollarization. What we are seeing in the country is a monetary disorder. The country can't be in a state where we don't know what is going on, what currency is being used. There are products being sold in dollars, others are being sold in bolivars. There is no regulatory framework for this. Either the economy should be dollarized or not but in the meantime, that is what is producing this; a series of disruptions, where four months ago there were no products because there were fierce price regulations for all products and today there is no control." VARIOUS OF CUSTOMERS PURCHASING GOODS AT STORE TUNA CANS ON SHELVES CUSTOMERS PURCHASING GOODS AT STORE PRODUCTS ON SHELVES SIGN THAT READS: "$ 9" (SOUNDBITE) (Spanish) FELIPE CAPOZZOLO, HEAD OF CONSECOMERCIO CHAMBER OF COMMERCE, SAYING: "Today these products are entering the country without any sanitary regulation, to start with, and in most of cases, without paying tariffs and taxes that some of these products should pay. This turns into an unfair competition. A competition where imported products are competing against products made in the country in a way which is not balanced.'' PUERTO CABELLO, VENEZUELA (RECENT - DECEMBER 10, 2019) (REUTERS) EXTERIOR OF STORE CALLED "MINI WALMART" VARIOUS OF PRODUCTS ON SHELVES BAG OF DETERGENT WITH LABEL THAT READS (Spanish) "ONLY FOR SALE IN VENEZUELA" CUSTOMERS LOOKING AT PRODUCTS ON SHELVES VARIOUS OF CUSTOMER PURCHASING GOODS AT STORE (SOUNDBITE) (Spanish) CUSTOMER, DANIEL MANDOLFO, SAYING: "At first getting used to it is quite cumbersome, quite uncomfortable because you do not get national products. We are seeing that we are able to access international products and we are not producing the quality we used to which was very good and of course we miss it and want it back. But due to that inconvenience, we are able to access imported, high quality products, at a very good price." VARIOUS OF PRODUCTS ON SHELVES
- Embargoed: 30th December 2019 18:44
- Keywords: Caracas Costco Florida Miami President Nicolas Maduro Venezuela Walmart food shops
- Location: CARACAS AND PUERTO CABELLO, VENEZUELA
- City: CARACAS AND PUERTO CABELLO, VENEZUELA
- Country: Venezuela
- Topics: Government/Politics
- Reuters ID: LVA006BA87KNB
- Aspect Ratio: 16:9
- Story Text: While U.S. President Donald Trump wants to drive Venezuela's socialist ruler out of power with economic sanctions, there has in fact been a burgeoning influx of American-bought goods from Nutella spread to Oreo cookies.
Many toiletries, food items and other imports became impossible to find during Venezuela's economic implosion under President Nicolas Maduro. Yet now they line the shelves in scores of new U.S. dollar-only shops known as "bodegones," providing an unlikely safety valve for Maduro.
Venezuelan businessmen have taken advantage of his government's quiet abandonment of price, currency and import controls to buy direct from U.S. wholesalers including Costco and Walmart.
The goods are delivered to Florida-based door-to-door services run by Venezuelans, according to 11 interviews with customs agents, operators and businessmen. The products move in bulk via shipping companies with bases in south Florida who have this year enjoyed a 100% exemption of import duties and waiver of some paperwork at the Venezuelan end, the sources added.
The shift shows how Venezuela's economy is evolving to survive sanctions that have hit oil exports.
The trade from Florida does not violate Trump's sanctions because they target business with Maduro's government not with private entrepreneurs. It has, however, bemused some Venezuelans used to constant "anti-imperialist" rhetoric.
The "bodegones" are reminiscent of the dollar-only stores communist Cuba ran for foreigners in the 1990s.
Reuters found 120 new such stores in Caracas alone, primarily in middle class areas, outnumbering the 27 bolivar supermarkets in those areas. Competition has brought down the price of niche-market items such as boutique hair products.
The abundance on shelves contrasts with years of scarcity of basics from shampoo to milk borne out of socialist regulations that often forced merchants to sell below cost.
"Bodegon" owners often buy online or partner with door-to-door services who scour chains for knock-down prices.
At least half of the stores Reuters visited sold products from Members Mark, which is Sam's Club's private brand, and Costco's Kirkland brand. Popular items include pancake mix, Pringles, ketchup and cereal, often selling for double or more their U.S. price.
Some of the "bodegones" buy from wholesale importers, meaning they have to hike prices further for margins, so pancake mix for $6.50 or thereabouts in Costco goes for $14 to $20 in Venezuela depending on how many hands it has been through.
Costco declined to comment, while Walmart did not respond to a request. Venezuela's Information Ministry, tax authority and state port agency also did not respond to requests for comment.
Asked for its view of the trade, given the underlying aim of sanctions, the U.S. Treasury Department did not respond.
This year's waiver of import duties and some documentation has been a boon to businessmen, used to crippling bureaucracy and regulations for years.
The exemptions expire this month but may be extended.
Felipe Capozzolo, head of Consecomercio chamber of commerce, said the "bodegones" had become an unofficial part of "state policy" to enable Venezuela to stay supplied under sanctions and thus ease pressure on the government.
Maduro himself acknowledged the help from dollar transactions, saying last month they were an "escape valve" for the suffering economy.
Though data has for years been scarce in Venezuela, local think tank Econalitica estimated that in October a remarkable 54% of transactions in main cities was in foreign currency.
(Production: Johnny Carvajal) - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2019. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None