MEXICO CITY. – The routine goes something like this: Step 1- previously locate the names and addresses on the web of some of the virtual stores that send food and cleaning products to Cuba; Step 2- check almost on a daily basis what new items are being offered and if the store is distributing in your province; Step 3- open other web pages in order to compare options and prices; Step 4- pick one store and buy everything that your family in Cuba needs (which is usually more than is available); Step 5- pay (with Visa or Mastercard), and notify your family that a package should be arriving in a few weeks (if you’re lucky) and to wait for it; finally, Step 6- wait to be notified that the package has been delivered and that your family will have lesser shortages for the moment.
With the present health and food-distribution crisis that Cuba is facing today, where finding basic products is like going hunting, many Cuban emigres have had to incorporate this routine of online purchasing to alleviate shortages that affect their families in the island.
For others, this has become another business opportunity. It doesn’t matter what prices the owners of these platforms set for their products: faced with the general shortages of just about everything, there is no other option but to agree and pay.
The business of selling to Cuba –and getting paid abroad- seems to be so lucrative, that CubaNet was able to assess the earnings of 24 stores that send goods to the island. There could be more. Many of them have been sending products to Cuba for decades, by air and by sea. PSTExpress, which is run from Panama, or Pacotillas, which is registered in the U.S., have been sending electric motorcycles, cleaning and toiletry combos, spare parts and furniture for years.
At present, and due to limited access to the country due to a reduction in flights, other outfits have emerged, whose supply alternatives do not necessarily originate abroad. The product providers are already inside Cuba.
Among them, there are stores like Alawao, which sells natural products in combos. We are talking about grain, meat products and vegetables, all of which, according to the store’s webpage, are made available by private providers.
Also, there are others that provide industrial items that come from Cuban factories. The Lo Tengo store, registered in Canada, distributes throughout Cuba and sells only toiletries like soap, Bonabel cologne, Alicia-brand cream, etc.
However, the businesses that sell food items in a country where there is no food, are those that sell food, of course. For example, the well-known Supermarket23 sells two Kilograms of chicken breast for US$40. The clients who must send food items to their families don’t have a choice but to pay.
In 2020, two virtual stores in particular, that sell food items and other goods for Cuba, began to expand. One of them existed since 2006, but it consolidated its popularity in the present scenario. The second one was launched one year ago. Their names are Mall Habana and Katapulk.
Their success is based on the fact that they sell many products that are already inside Cuba. They only have to transport them from one province to another, and they have government contacts who make the operation possible.
Ciego Montero-brand soft drinks, domestic sherbets, and even Prodal-brand hamburgers (yes, the same brand of the explosive croquettes) which families have no way to purchase in the island (not even in hard currency), one can find on the online platforms. How do they secure these products if they are only produced in the island?
Who is behind these stores?
Let’s start with the most recent one. Katapulk belongs to Fuego Enterprises, Inc. (with US$ 19.1 million in capital), was founded by Cuban American Hugo Cancio on December 30, 2004. It is headquartered in Miami, Florida.
Recently, the Ministry of Foreign Trade and Foreign Investment (MINCEX, by its Spanish acronym) authorized registration of Fuego Enterprises, Inc. in its registry of foreign companies that do business in Cuba. Mr. Cancio himself stated that Cuba had rejected his request last year, but accepted it in 2021.
In accordance to Resolution 180/2021, signed by MINCEX minister Rodrigo Malmierca and published in the Official Gazette, Katapulk is authorized for “trading agricultural food products, crafts and consumer goods.” However, it will not be allowed to import or export directly on a commercial basis; and it will not be allowed to conduct wholesale or retail trade in general with regard to products and services, except those having to do with post-sale and warranties.
Although the resolution was published in the Gazette only last July, the company began to sell food products through the Internet in 2020, and has been expanding ever since. At present, it distributes its products to nine provinces –Pinar del Río, Artemisa, La Habana, Mayabeque, Matanzas, Ciego de Ávila, Las Tunas, Holguín and Santiago de Cuba- and, according to Cancio, the company makes around 1,000 deliveries on a daily basis.
The growth of the company is ostensible in that it has increased the variety of its products; for example, recently, it started selling milk and jams. In addition, due to the growing demand for its service, Katapulk has lowered its shipment prices; deliveries to Pinar del Río went from US$ 25 to US$ 18.
How do the food products reach those nine provinces? Cancio has hired drivers and private distributors in the island; now, having official authorization to operate, it will open its own office in Havana. Further west, in Pinar del Río, two sources confirmed to CubaNet that a warehouse within the Pesca Río company complex in that city will be given to Katapulk.
What exactly does Katapulk sell, and who is its supplier amidst the general shortages?
The Trade Association of Foods and Beverages – Sociedad Mercantil de Alimentos y Bebidas “La Estancia S.A.”- (referred to as La Estancia S.A., for short) was registered in February 2013, and operates with 100% Cuban capital. This company, which belongs to the Ministry of the Food Industry and has promoted itself through the presidency’s Twitter account, is one of Katapulk’s suppliers.
The box of 27 juice units (200 ml. each) which this store sells for US$ 14 comes from La Estancia, as do the 1-liter containers and one variety of tomato puree.
Another national brand that has an agreement with Katapulk is La Conchita. Headquartered in Pinar del Río, La Conchita produces puree, mayonnaise, marmalades and guava paste. Katapulk sells these products, as well as the “africana” chocolate-covered cookies, Guantanamera-brand coffee, Pinocho-brand sherbet, Caribe-brand cheese, Taoro-brand canned products, and other merchandise.
Something else that stands out about Katapulk, which has turned it into one of the most sought after online markets is that its prices are much more competitive. While Supermarket23 sells two Kilograms of chicken breast for US$ 4o, Katapaulk sells it for US$ 5.69, that is, four times cheaper than its competitor.
And it’s not just the chicken. The boxes of Ciego Montero-brand soft drinks that it trades, it sells for US$ 18.36. Katapulk’s prices are practically the same as when those products sold at the actual stores when you could purchase in CUCs. This indicates that the company sells at these prices because the Cuban state, which owns the suppliers, sells the products to them at wholesale.
If it weren’t for this practice, Katapulk would not be making a profit but only incurring losses, because it has to pay its workers and other costs. Let’s make it clear that these prices and state products one could find them in the online s tore even before its status in the island was made official. It seems not to have been an inconvenience for Katapulk not to be in the official registry in order for the state brands to negotiate with Cancio selling him whatever is not available in national-currency stores.
Hugo Cancio, the owner of Katapulk, is not just a regular Cuban American. Maybe his name is familiar to the reader: he was one of the principal actors during the Obama-era thawing with Cuba. He is also the owner of the magazines Oncuba and ART OnCuba, which the Cuban government allowed to register, in a country that has criminalized and persecutes the independent press. In fact, bombastic headlines in 2015 defined him as “the contact person for Americans to do business in Cuba.” Through his company, Cancio has presented Cuba’s most important artists in Miami, names like Silvio Rodríguez, Pablo Milanés and the group Van Van.
If the above does not give the reader a clue about who he is and his links to the power elite, let’s add that Hugo Cancio is the man wearing a suit and tie that is shaking the hand of Cuba’s ruler, Miguel Díaz-Canel, in the photo below.
Mall Habana and the privileges of its owner in Cuba
Mall Habana is an online store that has been operant since 2016 as part of Gold Black Investments, a company that specializes in electronic deliveries and trade, among other services, and was registered in Spain five years before.
In Cuba, it was added to the corporate registry for 2016. In the Gazette No. 4 of that year, one can read: “Registration of a license for the Spanish company GOLD BLACK INVESTMENTS, S.A. is hereby authorized and recorded in the National Registry of Branches and Agents of Foreign Trade Companies, affiliated to the Chamber of Commerce.” Recently, in April of this year, that license was renewed.
Contrary to Katapulk, this enterprise is not limited to the sale of food products. On its webpage, one can purchase perfumes and imported shampoos; privately baked cakes; underwear; appliances; hardware items; Cuban rum. This store offers a greater variety of products than Katapulk; in Katapulk’s defense, we should say that distribution outside the capital is wider with Cancio’s company.
In addition, Mall Habana offers other services, such as dinner and hotel reservations; mobile phone and Nauta recharge; and travel agency services. The competition hasn’t quite reached that level of service (yet).
What both businesses do have in common is that they sell products that only the Cuban state produces, even the same brands. Food items from La Conchita, La Estancia and Guantanamera-brand coffee are available on the virtual shelves. To those we should add Bucanero and Cristal-brand beer, Santiago-brand rum, and Havana Club. The meat-products company Bravo S.A., located in La Habana del Este, also sells hamburgers, hams, and seasoned ground-beef rolls to both companies.
As for the prices, those are similar to the official figures. Apparently, they acquire the products at wholesale prices and preferential tariffs.
However, the state products that Mall Habana trades are not limited to food. If one wishes to buy water jugs, trays, wall clocks, shower curtains that display works of art by Cuban artists (all produced by ARTEX), one can find those items at Mall Habana.
In February 2020, a meeting between directors of the corporate network GARDIS and José Carlos de Santiago, president of the Spanish company Goldblack, took place in Matanzas.
As a result of this meeting, to the aluminum carpentry items sold through their website, other items produced by GARDIS were added, such as kitchenware, mattresses, textile goods, construction material and paint.
José Carlos de Santiago, a Spanish citizen, is not only the director of Goldblack. De Santiago is also founder of Excelencias magazine, whose objective is to promote and spread information about culture, gastronomy, tourism, the automobile sector, and art in tourist destinations in Latin America and the Caribbean.
One of Excelencias group’s headquarters is located in Havana. The group continuously participates in the International Tourism Fairs held in Havana. This Spanish entrepreneur’s business centers on exploiting Cuba’s image as a paradise with beautiful beaches, delicious gastronomy, vintage cars that go around town and happy inhabitants. The real Cuba that the majority of the population endures is not included in its promotion. That doesn’t sell.
De Santiago is a stockholder, also, of Plus Ultra Airlines, a name that would go unnoticed were it not for a charter flight that this past April transported a contingent of Cuban physicians to Gabon.
Plus Ultra Airlines launched its operations in the Caribbean country in 2017. That year, 35 flights flew between Madrid and Havana, as recorded in the Aena registry.
However, the airline had never flown to Africa. Transportation of the Cuban doctors’ contingent was its first flight there. Could it be a coincidence that Cuba chose Plus Ultra Airlines to transport its physicians?
Gold Black Investments not only trades goods produced by state corporations, but also state corporations are among its principal clients. Among those, we have Grupo Empresarial Palco, the Telecommunications Company of Cuba (ETECSA, by its Spanish acronym), Habanos S.A. tobacco company, and the food producer Industrial Molinera in Havana.
As to a comfortable position of power in the island, let’s add José Carlos de Santiago. Although no famous photographs of him with the Cuban ruler have ever been published, he does appear in news notes and images at Cuba’s Foreign Ministry.
Contrary to other online stores, Katapulk and Mall Habana are managed by foreign citizens with clear links to those in power in Cuba. That is how channels are opened to obtain, directly from the state, the many products that they sell online.
As long as Cuban families remain unable to purchase food products inside the country, as is the case today, Cuban émigrés will continue with their online-shopping routine, over and over again. These online stores are a sound business for their owners and for the Cuban regime that acts as partner and provider, and trades jointly the very goods that it does not make available to Cubans in the actual neighborhood stores.
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