Local products priced higher than similar imported food

For all those who reside in Costa Rica, both Ticos and foreigners, it’s a common remark heard: “Costa Rica has become so expensive.” On a recent trip to my local “Americamart” I got out my pen and noted some prices that confirmed a suspicion I’d had for quite some time, that many Costa Rican-made food products are much more expensive than comparable imported products. Here are six eye opening examples:

1. Imported Brunswick (Canada) Tuna,170 grams: 750 colons, versus domestic Sardimar Tuna, 160 grams: 1,370 colons.

2. Imported Eskimo (Nicaragua) 2% milk, one liter: 650 colons, versus domestic Dos Pinos 2% milk, one liter: 735 colons.

3. Imported Old Milwaukee (U.S.A.) can of beer: 500 colons, versus domestic Imperial can of beer: 620 colons.

4. Imported Magic Time (U.S.A.) Parmesan cheese, 85 grams: 1,190 colons, versus domestic Fontana parmesan cheese 85 grams – 1,506 colons.

5. Imported Ritz (U.S.A.) crackers, 130 grams, 355 colons, versus domestic Bokitas, 125 grams, 390 colons.

6. Imported Nestle (U.S.A.) 12 cheese slices,180 grams, 1,380, colons, versus domestic Dos Pinos 12 cheese slices, 142 grams,  1,465 colons.

See the trend here? The imported food products often give more product for less money than their domestic competitors. How can this possibly be that local food products are priced so much higher than imported ones? Are domestically made food products so far superior in quality? Are they taxed so much more? Are labor costs so much higher? Are shipping costs so much more? The simple answers are no, nope, not at all and no way.

Why are the imported products so much cheaper? I believe that thanks to “Americamart” and their aggressive international purchasing and logistics power and their strong footprint in Central America are really able to deliver good value to consumers and create a more competitive food marketplace in Costa Rica. So, bravo! “Americamart”.

Why are domestic food products so much more expensive? I speculate that as a result of protectionist policies that buffer certain sectors, like dairy and beer for example, that there is no incentive to create value for consumers. Domestic products therefore tend to be priced at or above the “international price” that factors in all of the shipping costs and import taxes, versus a fair “domestic price” that should reflect lower labor and shipping costs and no import taxes whatsoever. Basically, domestic food products are strategically priced at the very high end of what the local marketplace will bear to maximize profits and to serve as a barrier to import competition.

So, if you want to support domestic food companies that deliver inferior quality products at superior prices, then go ahead, buy local. But, If you want to support free market international competition that creates value for consumers, then buy the superior quality imported products at the lower prices when you can.

Alec Westery Lebrant
This entry was posted in Reader Opinion. Bookmark the permalink.