It has taken longer than importers predicted but the benefits of Ecuador’s trade agreement with the European Union (EU) are finally showing up on store shelves and at cash register.
Ecuador’s larger supermarkets, such as Supermaxi and Megamaxi, say they are beginning to stock their shelves with hundreds of new food and drink products. Imports such as chocolates, candies, olive oil, pasta, cheese, liquor and wine, more than half of them available in Ecuador of the first time.
A spokeswoman for Corporación Favorita, owner of Supermaxi and Megamaxi, says that Ecuadorian shoppers are just beginning to enjoy a larger variety and lower prices as a result of the EU agreement. “Customers in Quito and Guayaquil are seeing it first but new products and should be available soon in all of Ecuador’s larger cities,” she said. “We are still recovering from the period of higher import taxes that the government imposed but those will be gone next month, so there will be additional savings for customers through the rest of the year.”
The import tax surcharge was applied two years ago by the government to keep dollars in the country, officials said, as the economy nose-dived following the oil bust. The surcharges, 40% and 45% on most imported consumer items, were extended for a second year following last year’s earthquake.
The Favorita spokeswoman said that European imports that had been stocked before the EU deal, are being sold for 20% to 35% less than a year ago. “For example, one liter of a popular brand of Italian extra virgin oil costs $8.60 to $9 today compared to $14 last year.”
Among the new items being strocked by Favorita, she says, are European cheeses and wines. “The prices are very competitive with similar products from South America.”
Liquor stores are also dropping prices on imports. One Quito outlet is selling a bottle of 12-year-old Scotch for $45 that was priced at $100 in November, while a mid-range vodka that sold for $60 last year is now priced at $26.
Felipe Cordovez, president of the Ecuador Association of Liquor Importers, believes that sales for popular brands of European whiskey, vodka, and gin will double in 2017 over 2016. “We have been waiting for years for a recovery,” he said. “The high taxes almost killed us.”
As with food, lower liquor costs are showing up first in Guayaquil and Quito. “Smaller stores in smaller communities have old inventories they have to sell off,” he said. “By the end of the year, all the consumers in Ecuador should see the savings.”
According to large Ecuadorian importers, such as Fedexpor, lower prices on cosmetics and clothes are also beginning to show up in larger retail outlets.
Prices for most consumer items will see an additional cost drop at the end of May as the national IVA adjusts from 14% to 12%.