Local private company harassed in Venezuela

Venezuelan Lorenzo Mendoza is the head of Empresas Polar, one of the nation’s main food producers. (Vanderlei Almeida/AFP/Getty Images)

Venezuelan Lorenzo Mendoza is the head of Empresas Polar, one of the nation’s main food producers. (Vanderlei Almeida/AFP/Getty Images)

By César Morales Colón for Infosurhoy.com — 24/05/2010

WASHINGTON, D.C., U.S.A. –Venezuelan President Hugo Chávez threatened to “go against” local food conglomerate Empresas Polar during his weekly Sunday TV and radio show.

Chávez accused Polar on May 23 of “hoarding foodstuffs” and instructed the Attorney General’s office to launch an investigation into the company.

“If they continue to hoard [food], then we’ll have to go for Polar,” he said. “There is a bourgeoisie that wants to hurt us again through food. They are not going to make it. We will progressively displace them from the food distribution system.”

Polar, a frequent target of Chávez’s verbal attacks, is one of the nation’s most sophisticated and developed private companies, producing a wide range of products – from the beer that gives the company its name to sodas, flour, wines, cooking oils, rice and ice cream, among others. Its food distribution network is one of the biggest in the Andean nation.

The Venezuelan government confiscated 120 tons of food in a Polar distribution facility in the western city of Barquisimeto on May 20, claiming it was “irregularly stored,” according to media reports.

Venezuelan chambers of commerce association Fedecámaras said in a press release the seizure showed the government’s “determination” to “put a brake on national production and destroy the private sector.”

“The government looks for any excuse to attack the private sector, compromising the offerings of goods and services in the local market,” according to the statement.

Chávez has earned a reputation for his constant nationalizing and harassment of private companies.

Polar was visited more than 100 times by government officials to supervise its operations in 2009, according to media reports.

“We see these attacks against private property [by the Venezuelan government] with worry,” Carlos Larrazábal, president of Venezuela’s businessmen association (CONINDUSTRIA by its acronym in Spanish) said in an interview with Venezuelan TV network Venevisión on May 24.

“In all confiscated companies, all we see is destruction and loss of jobs,” Larrazábal said. “We don’t see any successes.”

The difficulty for businesses to obtain U.S. dollars from the government – the country’s only entity that can exchange bolívares for foreign currency – coupled with the tightening of economic rules for the so-called “black market,” has created obstacles for the nation’s private sector.

“The government should expedite the delivery of U.S. dollars, make it efficient and timely, to avoid [further] lack of supplies and inflation,” Fedecámaras said in the statement.

Venezuelan economic analysts forecast the country’s inflation could reach 30% by the end of the year and the gross national product could fall 6%.

Jesús Casique, director of the private firm Capital Market Finance, said the Andean nation is experiencing “a strong period of economic ‘stagflation’ – the combination of contraction and inflation – that is the product of an obsolete and primitive model.”

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