Cuba says ‘yes’ to Starbucks, ‘no’ to lattes

Although Starbucks can now enter Cuba but has no plans to do so, legal obstacles prevent it from selling lattes or cappuccinos

Photo by: AP
Photo by: AP

Cuban and US flags hang from a resident's balcony on the day the US opened its embassy in Havana, Cuba, August 14, 2015

The Obama administration on Friday tore down barriers to US companies doing business with Cyva, but plenty of regulatory and legal roadblocks remain on both sides of the Florida Straits.

Airlines and cruise ships will see less meddling with their schedules, although the new rules approved by the president will not lead to a significant boost in visitors, as US law still prohibits most Americans from traveling there.

But Starbucks can still not sell prepared drinks such as lattes or cappuccinos, only packaged coffee, said John Kavulich, president of the US-Cuba Trade and Economic Council Inc.

The new rules of engagement have opened the door to Internet companies, but a Cuban government-owned company has the local monopoly on Web services. The prospects for retailers and restaurants are murky. Cuba's mostly poor population of 11 million has limited spending power and remaining US law tightly restricts what can be sold to the former Cold War foe.

And then there is the biggest wild card of all: the Cuban government, which will have the final say on who is licensed to do what.

"You don’t just go down to Cuba and hang up your shingles. That’s not how it operates," said Kirby Jones, head of Alamar Associates, which has advised companies on business in Cuba since the 1970s. Starbucks, for one, said it had no plans to enter Cuba.

However, executives described the relaxing of US rules as an important step toward opening up the Cuban economy to US investment in a wide range of industries.

United Parcel Service Inc said it "welcomes the opportunity to provide logistics services in and out of Cuba as regulations are changed".

A spokeswoman for Archer Daniels Midland Co, which has exported goods to Cuba under existing regulations, said the agribusiness group "will be ready to adapt to new opportunities as they arise."