Inflated prices of foods partly fault of government

Should we be surprised by the study conducted by the A.M. Costa Rica staff, as disclosed in the article on March 7, showing that prices for food and beverages in Costa Rica are 28 percent higher than Panamá?  In fact, the study revealed that the difference is even greater for some categories of food or beverages:  For example, rice – the price of which is controlled by the government – is 62 percent higher.  Chicken thighs are 50 percent higher.  Fresca is 89 percent higher. Coca Cola is 42 percent higher, and beer is 92 percent higher.

These differences may come as a shock to some, but not to those expats who travel and are able to compare.  What the study did not tell you, however, is that prices for food and beverages in Costa Rica are higher than in many areas of the United States.  My friends in southern Florida tell me, for example, that many food items cost less in Florida, particularly dairy products and beef and chicken.

Even fruits and vegetables produced in Costa Rica and exported to the U.S. can often be found at a lower price in Florida.

Many expats came to Costa Rica not only to enjoy its marvelous climate and natural beauty but also to enjoy a lifestyle that offers a lower cost of living.  But creeping inflation has significantly eroded their ability to enjoy a lower cost of living.

They were willing to endure the higher cost of vehicles, household appliances, construction materials and pharmaceuticals (often costing 50 to 100 percent more than the same item in the U.S), and were even prepared to pay a higher price for gasoline and diesel (the highest, in fact, of any Central American country).  However, they were not prepared to see the land of “pura vida” cost more to eat and drink.

How did this come about?  It happened in some cases because of direct governmental action, such as its control of the price of rice.  It has also come about because of government inaction, allowing one or two companies in a particular industry to dominate its market, giving it the ability to determine the price, particularly dairy, chicken, and beef, as well as many beverages.

Who benefits from these high prices?  Often, the actual producers of the product do not enjoy the advantage of high prices.  Instead, it is often a distributor or a retail company which has the ability to control its industry.

The net result is that the consumer — whether a Tico or an expat — pays more and enjoys less. Is it pura vida, or is it, regretfully, pura paja.

David Jackson
San Jose
and San Francisco, California
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