Due to weak competition in the local market, the prices of goods and services in the basic basket are significantly higher in Costa Rica than in nearby countries.
Friday, July 17, 2020
A report by the Organization for Economic Cooperation and Development (OECD), called the "Economic Study on Costa Rica", concludes that consumers in the country pay higher prices for milk, rice, vehicles and Internet services.
A relatively small number of large companies dominate the economy, indicating the need for better regulation to promote a more competitive business environment, says the OECD study released July 15.
For Luis Mastroeni, Director of Corporate Relations and Sustainability at Dos Pinos, there is a wide range of products on offer in the Costa Rican market. The director explained to Nacion.com that "... in the Costa Rican dairy market there are several companies and a great variety of brands in the different types of products. There is an opening process with other countries, particularly with the United States, which reinforces the trend towards a globalized market."
Alberto González, a member of the OECD's Economics Department, said that "... Costa Rica is an expensive country and many times it happens because of regulations that prevent competition. The situation of some markets in Costa Rica is the situation that has reached a bad balance."
The OECD representative believes that in the country there are no incentives to increase productivity, but at the same time there are certain sectors that, through high prices, extract income from the most disadvantaged classes.
According to Pilar Garrido, Minister of National Planning and Economic Policy, "... the Presidential Economic Council took up again the issues of distortions of specific markets, for which they use reports from the Commission to Promote Competition (Coprocom).
Dos Pinos and Distribuidora Corripio invested $30 million in the construction of a plant that has an area of 8,500 square meters and a packaging capacity of 250,000 liters per day.
The Costa Rican Cooperative of Milk Producers Dos Pinos and Distribuidora Corripio, founded the Caribbean Dairy Group, being their first joint investment the construction of the new industrial plant, which will produce 50 varieties of dairy products, juices, nectars and soft drinks of the Dos Pinos and La Granja brands.
In the past five years, retail sales of ice cream have increased by 71%
The franchise model and market segmentation has been the scheme which artisanal ice cream shops have used to maintain their share in a market where 85% belongs to only one competitor, the cooperative Dos Pinos.
Plans by Costa Rica's Dos Pinos Cooperative to build a US$6 million dairy products plant in Nicaragua could lead to higher milk prices there, Nicaraguan companies claim.
Besides Nicaragua, Dos Pinos is planning projects in Guatemala and Panama because Costa Rica's milk production is not growing fast enough to meet demand.
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