CUBANET ... CUBANEWS

August 26, 2002



.S. firms seek sales in Cuba with food fair

By Nancy San Martin. Nsanmartin@Herald.Com. Posted on Sun, Aug. 25, 2002 in The Miam Herald.

The dairy cows and beef cattle will be flown to Havana's international airport all the way from Minnesota. North Carolina will send a few hogs. But the buffalo from North Dakota will likely draw the spotlight.

''It's showtime,'' said Eric Wailes, an agricultural economist at the University of Arkansas.

The livestock will be on display late next month as part of the first food and agribusiness exhibition to take place in Havana in decades. It was organized specifically for U.S. companies that hope to get a piece of the expanding Cuban market.

The trade show -- the first to be held on the island since Fidel Castro assumed control of Cuba -- will include some of America's agricultural giants, suggesting that President Bush will face intensified pressure from supporters of normalized relations between the two nations.

''This is creating tremendous excitement, interest and expectation,'' Wailes said. "Any time you open up commercial relations, you're affecting the existing political relationship.''

More than 180 exhibitors displaying about 1,000 products from at least 32 states and Puerto Rico have signed up for the U.S. Food & Agribusiness Exhibition Sept. 26-30 at Havana's Palacio de las Convenciones. As many as 20,000 visitors are expected.

Although American products have been imported to Cuba via third countries for years, last week's shipment of brand-name foods was the first to arrive directly from the United States.

'This event meets the definition of 'significant' because it is the first such event to happen in Cuba specifically for U.S. companies,'' said John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a New York-based group that tracks the island's economy. "It's also significant that the exhibitors have a reference point: They know what Cuba has already purchased and what they have said they will purchase.''

PRETEXT FOR SALES

Cuba has bought more than 770,000 tons of U.S. food since the damage caused by Hurricane Michelle last year created a humanitarian pretext for direct food sales to Cuba. U.S. companies are allowed to sell food and agricultural products to Cuba under the Trade Sanctions Reform and Export Enhancement Act of 2000, which reauthorized direct commercial exports to the island on the condition that sales be paid for in cash.

At first, Cuba refused purchases because sales were conditioned on immediate cash payment -- not the usual practice in international food sales, which usually proceed on credit. But the government changed course after Hurricane Michelle, saying foreign policy considerations had to yield to the needs created by a natural disaster.

Participants said the show is a rare opportunity for them to market products to consumers who are both nearby and in need of commodities.

''What this means long-term is that maybe, just maybe, with us selling over there, it would clear up some things,'' said Mike Mauricio, owner of Tampa-based Florida Produce of Hillsborough County Inc., which recently sold the first batch of U.S. onions to Cuba in more than four decades. "Maybe the Cuban people in the street will benefit, and that's a pretty thing. Maybe it's building a bridge between the two countries.''

Not likely, argue those who say the embargo is not the cause of Cuba's woes.

''There will not be unlimited investment in Cuba so long as Castro is in control,'' said Gary Shiffman, an adjunct professor at Georgetown University who recently wrote a paper on the issue. "He needs to maintain the gap of wealth between the government and the Cuban population. Otherwise, he loses power.

NOT CONVINCED

"All this [trade show] does is give Castro the opportunity for great rhetoric and gives people who haven't been to Cuba a chance to go.''

Cuban officials have said the event will help identify new products and pave the way for further sales.

''Many of the contracts for these new purchases will be signed during the exhibition,'' Pedro Alvarez Borrego, chairman of Alimport, Cuba's primary food purchaser, said recently.

Meanwhile, companies eager to cash in on the multimillion dollar market are competing for attention with a variety of gimmicks, including a 1950s-style diner to serve soy burgers and shakes; grown men prancing around in egg costumes and the world's fastest omelet maker.

All of it will be aired live to rural America on an hourlong radio program called AgriTalk that broadcasts to approximately 750,000 listeners in 24 states.

''We're going to report exactly what is going on there,'' said Don Schultz, general manager of Doane Broadcasting, based in Kansas. "We want our audience to know about the underlying possibilities for free-trade opportunities.''

SALES POTENTIAL

With a population of 11 million, Cuba represents a significant market for the agricultural industry. U.S. sales amounting to $4.5 million last year boosted Cuba's ranking to 144 out of 228 agricultural-product export markets, according to federal statistics on the export products purchased from U.S. companies.

Today, Cuba ranks 41st with a total market value of agricultural products and branded food products already purchased or under contract estimated at $105 million. Cuba is expected to purchase another $165 million worth of food products by the end of the year, bouncing it ahead of other countries that import from U.S. companies, including Denmark, the Bahamas, Portugal, Chile, Poland and Vietnam.

Purchases worth an additional $260 million are under way for next year.

Georgia's agriculture commissioner, Thomas Irvin, who will be attending the event, said the sales already brokered represent only the tip of what could be an explosive market.

''We think it's going to be quite exciting,'' said Irvin, adding that more than 10 companies from his state will have booths displaying goods ranging from cotton products to timber.

Most of the exhibition items likely will be transported by plane from Miami.

FIELD TRIPS

The show also will open to the public for one day and field trips are planned for exhibitors to visit farmers markets, flour mills, processing plants and food storage facilities. Some also are likely to visit the new government-operated supermarket in the Miramar suburb.

One of the show days has been dubbed ''trademark day'' and is intended to give companies an opportunity to register their product names in Cuba. This immediately protects companies against the circulation of phony products bearing similar names and establishes a measure of goodwill for the day when they seek to establish conventional manufacturing or sales programs in the country.

More than 4,000 U.S. companies already have registered their trademarks, according to the U.S.-Cuba Trade and Economic Council. The trademarks, some of which have been registered since 1918, vary from Nine Lives cat food to mega-corporations such as General Motors, Hallmark, Hertz and Avis. More recent registrations include The Home Depot, Kmart, Planet Hollywood, McDonald's, Pizza Hut, Starbucks Coffee, United Airlines and United Parcel Service.

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