Pandemic, Smuggling and Black Market

Given the crisis in the region, businessmen in Guatemala report that smuggling of Mexican products has increased, while in Panama, beer producers attribute the rise in illegal trade in alcoholic beverages to the dry law.

Tuesday, April 21, 2020

With the spread of Covid-19, governments in Central America have decreed mandatory quarantines and have also restricted the movement of consumers at certain hours.

You may be interested in "New Commercial Reality: How to Reach Customers"

Arguing that the aim is to reduce crime and avoid crowding, in Panama the authorities have prohibited the consumption, sale and distribution of alcoholic beverages until the end of the State of Emergency.

In a letter, the Panamanian Association of Artisan Brewers (ACAP) asked President Laurentino Cortizo to reconsider the dry law, as there is no scientific evidence that the measure is helping to reduce violence or mitigate the spread of the SARS-CoV-2 virus.

Also see "Changes in Lifestyle and the New Commercial Reality"

Alexandra Icaza Manfredo, president of the ACAP, told Prensa.com that "... it has been proven throughout history that 'the ban is an inevitable stimulant for the dangerous black market, which ends up making the remedy worse than the disease. It falls into the home production of adulterated products that are really harmful to health." See "Artisan brewers ask to reconsider 'dry law', because it stimulates the black market of liquor"

In Guatemala, the business sector reports that smuggling of groceries and cleaning products from Mexico has grown, a rise that is largely explained by the depreciation of the Mexican currency.

Enrique Lacs, executive director of the Guatemalan Chamber of Food and Beverages (CGAB), told Prensalibre.com that "... The reports are that there was little commercial activity in products in general but the smuggling of basic grains had an increase in mid-March, and in food it has increased by 20%, while in personal hygiene and cleaning products it grew by about 40%." See "Coronavirus: Entrepreneurs Report Increased Smuggling of Groceries and Cleaning Products."

In the context of this business transformation, CentralAmericaData developed a georeferenced information system, which allows the identification of behavior patterns and consumer preferences in any Central American market. We have detailed information on the number of people, their location by area and their socio-demographic characteristics, such as gender, age, socioeconomic level and other relevant data such as interests and preferences.

The tool provides information on the concentration of the population by age groups, fundamental data for making business decisions such as where to open a new sales point, to adapt to new product delivery times, among others.

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More on this topic

Liquor, Curfews and Smuggling

January 2021

As a result of the restrictions on mobility and the ban on the sale of alcoholic beverages, which were decreed in 2020 to mitigate the outbreak of covid-19, it is estimated that the smuggling of liquor from Mexico into the Guatemalan market increased considerably.

According to the report Prohibitions, illicit alcohol and lessons to be learned from the covid-19 lockdown, prepared by the Transnational Alliance to Combat Illicit Trade (Tracit), the dry law imposed for long periods boosted sales of smuggled alcoholic beverages.

Food and Beverage: Projections for Panama

April 2020

Given the health crisis, the food and beverage sector would be partly affected by the drop in the production of soft drinks and alcoholic beverages and the decline in sales of fish and seafood preparations.

The "Information System for the Impact Analysis of Covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies, depending on the country, sector or economic activity, during the coming months.

Rebound in Smuggling Forecasted

November 2018

In Guatemala, food and beverage businessmen estimate that product smuggling during the end of 2018 will increase more than reported in previous years.

Complaints by Guatemalan businessmen regarding the illicit marketing of different types of products have been a constant in recent years. Long-standing calculations detail that of every ten products sold in the country, three are of illegal origin.

The Scourge of Smuggling

November 2017

The impact of illicit trade in Guatemala is such that "in the case of the paper industry, smuggling has grown to the point of taking away a portion of the market from companies and 30% of their turnover."

Guatemalan businessmen say that out of every ten products sold in the country, three are of illegal origin. The impact of illicit trade on business activity can already be seen in the turnover of companies, who are also forced to reduce their employee payrolls.

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