Fines for not complying with price limits can exceed 8,000 pesos.

The Cuban government will impose fines that could exceed 8,000 pesos on private businesses that fail to comply with the recently implemented price cap on six high-demand basic products.

This Wednesday, just two days after Resolution 225/2024 of the Ministry of Finance and Prices came into effect, which set the retail prices for cut chicken, edible oils (except for olive oil), powdered milk, pasta, sausages, and powdered detergent, the government deployed an inspection operation nationwide to detect price violations and penalize offenders.

Vladimir Regueiro Ale, Minister of Finance and Prices, stated on the prime-time broadcast of the official Cuban television news that 1,079 "control actions" were carried out, in which fines or warnings were imposed on the individuals responsible for 393 price violations.

Regueiro stated that measures were taken in all cases and fines of "around 8,000 pesos" were imposed.

Although he stated that in some cases the sanctions were "as a warning, according to the seriousness of the infractions," he admitted that in the majority of the violations, the fines established by Decree-Law 30 of 2021 were applied.

The amounts of the fines could even be higher than 8,000 pesos, as, according to the Cuban minister, that sum could be considered "low" for some private business owners.

"We know there is a range of income in this sector where, in some cases, this fine that we are applying could even be considered low," stated the official of the regime, who appealed to the regulations in force for the past three years to justify the punitive measures, so it is not ruled out that these could be higher depending on the gravity of the violations."

"All of this is based on legal grounds, what has been studied, has been trained," he insisted.

Regueiro reported that in Havana, where "there is a higher dynamism in all forms of non-state management and the commercialization of these products," 183 inspection actions were carried out, six of them based on complaints made by citizens, and 75% of violations were detected.

It was specified that in the capital, an establishment was closed, to which the authorization to sell products was temporarily revoked until they regularize their situation regarding accounting controls and storage conditions.

Additionally, the inspectors forced 12 "forced sales" to be carried out, meaning that the products had to be sold at the established prices.

According to the minister, owners of non-state entities - self-employed workers, micro, small and medium enterprises, and non-agricultural cooperatives - have been trained in pricing matters. However, he warned that at the same time, "we have to create this perception that all of this is under control and that with the commitment we have to the population, which is the main purpose of this measure, we will take the corresponding actions."

At the same time that it set maximum prices for the retail sale of six essential products, the Cuban government eliminated the payment of customs duties on the importation of these products, with the intended purpose of mitigating the impact of inflation on consumers.

Additionally, it established a profit margin of up to 30% on costs and expenses, provided that the prices defined in the annex of the resolution are not exceeded.

The approved regulation specifies that the establishment of these maximum prices does not imply or justify an increase in current prices if they are already lower.

At the beginning of the month, the Cuban government announced that it had prepared an army of 7,000 inspectors to enforce price caps.

Entrepreneurs and managers of small and medium-sized enterprises have expressed their dissatisfaction with the government's policies to control inflation. "If they want essential products to continue coming in, this is not the way," warned an entrepreneur about the decision to cap prices on six basic products sold by the private sector.

In an analysis of the possible consequences of the implementation of these measures, the renowned Cuban economist Pedro Monreal stated that, "instead of using the market to flexibilize 'the plan', they numb the market with the plan".

Monreal considered that it is not only a matter of insisting on establishing "the ineffective 'price caps' traditionally applied to agricultural products, but also of forcing national private companies to adopt the Soviet method of price formation."

Meanwhile, the Food Monitor Program, a program for monitoring and reporting on food insecurity in Cuba, warned that the recent government measure to cap food prices could lead to increased shortages and a black market in the country.

The experts expressed concern that this "unilateral" measure may affect the private sector, discourage investments, lead to greater shortages, and fuel the black market.