Emerging Opportunities for Food and Drink in Cuba

by Anthony Coppola2 Min Read

Cigar lovers have recently been rejoicing because for the first time in more than 50 years they can legally bring Cuban cigars into the United States. Make no mistake, America’s Cuba embargo has not been lifted. But the undeniable fact remains: U.S.-Cuba relations are opening up.

For Cubans, American-style fast food has been almost completely non-existent. As relations liberalize, there may be huge opportunities for American franchises.

Two important organizations within the U.S. government have diminished the effects of the Cuban embargo. The first is the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC). They are the ones whose regulatory changes have made it easier for Americans to travel to Cuba and have allowed people to bring back up to $400 of items from Cuba including up to $100 of alcohol and tobacco. Unfortunately for the entrepreneurs out there, these items are only allowed for personal use. 

Perhaps more exciting to business owners are the changes made by the U.S. Department of Commerce’s Business of Industry and Security (BIS). Under BIS’s new License Exception Support for the Cuban People, certain limited goods may now be exported to Cuba. These goods consist mostly of tools and building materials.

These licensing exceptions are a sign of the liberalization of the relationship between the U.S. and Cuba. But it will not be possible to do full-scale business in Cuba without an act of Congress that actually removes the numerous sanctions on Cuba. 

But if and when Congress does act, there may be huge opportunities for the restaurant industry. The restaurant industry has been heavily restricted in Cuba. The privately owned restaurants that have existed were (and for the most part still are) under heavy state regulation. 

Restaurants called Paladars are quite popular among those looking for a taste of real Cuban cuisine. These are essentially small restaurants serving home-cooked meals operated out of family living rooms. But for visitors to Cuba, they have long served as one of the best ways to savor authentic Cuban cuisine.

On the flip side, for Cubans, American-style fast food has been almost completely non-existent. As relations liberalize, there may be huge opportunities for American franchises in Cuba. 

When the first McDonalds opened in Russia on January 31, 1990 it was mobbed by tens of thousands of people.  To this day, it remains one of the busiest McDonalds in the world, and is believed to serve as many as 40,000 people per day

So the opportunities may be great for American businesses in Cuba especially when we consider the geographic proximity of Cuba to the United States. But it is important to remember that the embargo is not gone just yet.

Businesses looking to move operations into Cuba need to keep a close eye both on the actions by the U.S. Congress, which can repeal the Embargo and on the Cuban government, which regulates restaurants in Cuba. 

But the hurdles these organizations have placed no longer look insurmountable. And if relations do liberalize, enterprising restaurateurs willing to take the chance of opening shop in Cuba may realize huge opportunities and possible profits.

Anthony Coppola

@ppolajabaly | LinkedIn | Website | Email

Anthony Coppola is a Member at the Alexandria, VA law firm Coppola & Jabaly, which serves small businesses. He has practiced law as an appellate litigator at Greenberg Traurig. He also developed his professional skills working at the Legal Writing Pro, the D.C. Public Defender, and the U.S. Department of Labor Office of the Solicitor.

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