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.
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.
In the view of businessmen in Guatemala, the country has become a connection center for merchandise that is transported illegally from the Colon Free Zone, in Panama, to the Corozal Free Zone, in Belize.
Within the to and fro of contraband products moving from the south of Central America on the route to Mexico, a significant amount stays in Guatemala, where criminal structures are responsible for "marketing" these products throughout the territory.
It is estimated that 4 out of 10 products that are sold in the local market are of illegal origin, mostly medicines, liquors, soft drinks, beers and cigarettes.
The union of Honduran businessmen estimates the country's losses caused by contraband goods at $127 million, a phenomenon which occurs to a greater extent in products for human consumption, such as medicines and beverages.
Guatemalan businessmen are demanding stricter laws to combat the illegal entry of goods from Mexico, which are now being sold in El Salvador and Honduras.
Food and beverage companies say that in the municipality of Acajutla, El Salvador, it is possible to buy oil, flour and crackers that were illegally smuggled in from Mexico, first passing through Guatemalan territory, and eventually being sold on Salvadoran soil.
The aquaculture sector has estimated losses due to theft of the product, which is repackaged in clandestine facilities and then sold in the local market and in El Salvador, at $35 million a year.
Honduran aquaculture companies had hoped that waybills, or shipment details documents, which came into effect with the new 2014 Shrimp Farming Act would help control illegal trade of shrimp, but sofar it has not. The National Aquaculture Association of Honduras (Andah) estimates that every year the industry loses 16 million pounds of shrimp.
The Executive Directorate of Revenue in Honduras is putting out to tender the implementation in Tegucigalpa of a control and monitoring center.
Honduras Government Purchase DEI-BID-LPI-063-2015:
"Description of the Sub Systems:
-Infrastructure Support: Relates to conditioning of the site, wall cladding, false ceilings and floors, LED lighting, air conditioning, common telecommunications infrastructure, furniture equipment for use by technical staff, etc.)
In Honduras shortages caused by cattle smuggling and uncontrolled exports to Guatemala and Mexico have forced the closure of a plant which in 2014 exported $37 million worth of meat products.
The company Carnes y Derivados SA de CV decided to stop operating the plant that operated in Catacamas, Olancho province, mainly due to the shortage of cattle which is affecting agribusinesses in the country.
It has been indicated that deductions and taxes incurred by coffee farmers is the reason for smuggling of the grain to neighboring countries.
According to an article on Laprensa.hn Emilio Medina, manager of the export company Beneficio de Café Montecristo, "... taxes and deductions applied to each hundredweight of coffee exported combined with low grain prices in the international market have led to increased smuggling of the aromatic to Guatemala and Nicaragua ... This traffic of coffee to neighboring countries has affected the volume of shipments and foreign exchange. "
"If the calculations made for Guatemala in 2013 and 2014 are taken as a reference for other Central American countries, the volume of illegal trade in the region, could be between 3.4% and 4% of GDP".
"If the calculations made for Guatemala in 2013 and 2014 are taken as a reference for other Central American countries, the volume of illegal trade in the region, could be between 3.4% and 4% of GDP".
The government is looking for alternatives to resolve the conflict between producers and traders, which has generated shortages and led to a rise in prices.
In recent weeks the shortage of meat in the country has caused an increase in prices in the market, despite being one of the products in a list whose prices are controlled. A pound of meat has risen to $2.75. This shortage is attributed to illegal smuggling of cattle to Guatemala.
Producers in Honduras have denounced the existence of an alleged trade triangulation in which Guatemalan companies are importing shrimp from Ecuador to then export them to Mexico.
This commercial triangulation, according to the National Aquaculture Association of Honduras (Andah), creates unfair competition and affects the performance of local industry, and could even be one reason behind the decline in product prices.
Liquor distribution companies are demanding that the government improve measures to control the illegal entry of spirits, particularly from Nicaragua.
The cost of a box of 24 units of Nicaraguan liquor ranges from $13.50 to $14, while in the Honduran formal market the same amount costs between $19 and $26.50. The obvious difference in prices and growing demand for the product due to the proximity of the holiday seasons are the main factors that contribute to an increase in alcohol smuggling in Honduras at this time of year.
As part of the controls to combat smuggling, between May and July 29 companies were suspended from the list of importers, which represents 60% of the total volume of pairs of shoes entering the country.
In order to detect and prevent irregularities in the import of footwear, the General Administration of Federal Tax Audit Tax Administration Service of Mexico carried out 31 audits "...
Industrialists are warning that the 2013-2014 harvest losses could exceed current projections of 600 million hundredweight.
The reduction in purchase volume in the north of the country has caused alarm in the industry which believes that the product is coming in through the border with Guatemala and being sold mainly in Cortés and Santa Barbara.
Representatives from the Association of Sugar Producers of Honduras (Apah) reported in an article on Laprensa.hn that "... 'There is a direct relationship between smuggling and sales by the central market of Honduran sugar. During the last months we saw a significant decrease in the area, which alerted us that something irregular was going on, this is a mass consumption product and one of the most indispensable in the basket, so there should not be a decrease in demand. '"