TrueBlueAmerican

This is all about destabalization. These corporations dont care about hungry Venezuelen people. They would glady throw away the food and let it rot; thats just a strategic expense towards achieving their goals. But not to worry, Hugo has declared that the government will fight back by investing over 500 million dollars to make sure that basic commodities are available for everyone.

DanS.

Proof please.

TrueBlueAmerican

Venezuelan(destabalizer) looters sack market in Chavez hometown

CARACAS, Venezuela: Residents looted a government supermarket in President Hugo Chavez's hometown, prompting the state to send in troops, a security official said Friday.

About 100 soldiers and police were sent to the southwestern city of Sabaneta to protect merchants from mobs who looted a government food store there on Wednesday, Barinas state security secretary Pedro Mosqueda told The Associated Press.

Sporadic shortages of basic foods like milk, chicken, flour and sugar have irritated Venezuelans for months. Critics blame government price controls and foreign currency restrictions, which make it harder for importers to buy food abroad. The government contends that strong economic growth has simply boosted demand faster than supply.

The problem is a political liability for Chavez, who suffered his first electoral loss in December when voters rejected constitutional changes that would have let him run for re-election indefinitely.

Mosqueda on Friday blamed the unrest on "destabilizing groups" and members of the political opposition, who he said were drawn to the rural town because of its symbolism as Chavez's birthplace.

The situation in the streets was "normal" on Friday, Mosqueda said.

DanS.

Thank-you...but I wasn't asking for proof of shortages...I was asking for proof that corporations wanted to see the people suffer in order to raise profits...

But according to your article it's the govt. fault there is shortages? Makes sense...it's an economic fundamental that price ceilings cause shortages....

In the absence of that I also do understand that is is a huge problem that as countries develop non-manufactured goods such as food do not increase in demand as much as manufactured goods do...thus the prices do not increase as dramatically and more resources are poured into the more profitable manufacturing sector....which is one of the main reasons we subsidize our farming industry(rightly or wrongly)

TrueBlueAmerican

I am not saying that they are throwing food away, im saying that they wouldnt have a problem doing that, which is my response to the issue raised about food spoiling.

I would hoard and throw away food if I were the owner of a Venezuelen business that is trying to overthrow the current governement.

If the food lasts when I decide to sell it, then I sell it and make a profit.
If the food spoils, then I throw it away and create hungry angry Venezuelens.

You jumped the gun on your previous post.

DanS.

ahhhh....I see...I don't think so...but that's just my opinion...What's happening in Venezuela happens in every other socialist or socialist/leaning country.

DanS.

It's not outside of the realm of possibilities...weirder things have happened....but looking at history it tells me why this is happening. Looking at it economically it tells me why this is happening...so if I had to make an educated guess from what I know and what is being reported...then I would have to say it isn't part of a conspiracy.

TrueBlueAmerican

It could be true that the demand increases faster than the supply does in the sort run. That said, hoarding food certainly wont help resolve the food shortage: a good thing for an opposition group that demands that government shouldnt work, in this case providing basic commodities. Unfortunately for the groups out in front on this one, Hugo aims to prove them wrong.

This is not a move to seize all businesses, just the ones that carry out these practices. If your Venezuelen business is not hoarding food, then you have nothing to worry about. If your Venezulen business is hoarding food, then you have alot to worry about.

Heretic

It does if you want to plan a coup or create false outrage against a president by blaming him for any fabricated shortages.

So you don't recall when farmers back in the 80's threw away their crops and livestock to boost prices? That fact is this strategy has a history of working.

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Chávez Tasks Food Producers Amid Shortage

As food shortages mount, Venezuelan President Hugo Chávez is taking aim at the foreign companies that dominate much of his country's food sector.

Last week, pro-Chávez protesters picketed the big Mexican soft-drink bottler, Femsa SA, and a senior diplomat assailed another prominent Mexican company, industrial baker Bimbo SA.
• The News: As food shortages plague oil-rich Venezuela, Mexican food companies that invested heavily in the country in the 1990s are becoming convenient scapegoats.
• What's Happening: As Venezuelan strongman Hugo Chávez issues not-so-veiled threats against food giants like Nestlé and Parmalat in public, a pattern of below-the-radar skirmishes target Mexican firms who play an important role.
• The Upshot: Mexico's leading corn miller, Gruma, has already been pressured into divesting part of its holdings. Will others follow?

On Friday, protesters ended a weeklong blockade of Femsa plants after the company pleaded for government help to remove them. The demonstrations, related to a decades-old labor dispute, affected more than a dozen soft-drink plants across Venezuela.

Venezuela's ambassador in Mexico, meanwhile, accused Bimbo of funding political groups opposed to Mr. Chávez and organizing "an orgy of international anti-Chávez-ism."

The pressure on both firms may signal a tougher line by the government against foreign companies in politically sensitive industries like food. The growing scarcity of staples, such as milk, chicken and eggs, is denting Mr. Chávez's popularity and could worsen the political climate for food companies.

In a sign of how serious the shortages have become, looters last week ransacked government food warehouses in Mr. Chávez's hometown of Sabaneta. About 100 soldiers and police were sent to the city to restore order, according to the Associated Press.

Shortages have become a problem because of price controls implemented by Mr. Chávez, in an effort to stem galloping inflation, caused by Venezuela's oil-fueled spending. Companies in many industries complain official prices don't leave room for profits. Mr. Chavez, meanwhile, accuses the companies of hoarding food.
[Hugo Chavez]

The Venezuelan president has a history of putting pressure on food companies. In January 2003, just before Femsa entered the Venezuelan market, the army raided two Coca-Cola bottling plants belonging to a company called Panamco, saying its owners held food and drink off the market during a general strike that roiled the nation for weeks.

Later, the Chávez government expropriated holdings of other food companies, paying cash to acquire a tomato processor owned by Pittsburgh-based H.J. Heinz Co. in 2005 and a milk processor belonging to Italy's Parmalat SpA last year. Mr. Chávez threatened this month to seize Parmalat's remaining plants, as well as those belonging to Switzerland's Nestlé SA, if the companies hoard milk.

The protests against Femsa, the biggest Coke bottler in Latin America, stem from a pay dispute involving truckers formerly associated with a Panamco bottler Femsa purchased in 2003, but who were never involved in the Mexican company's operations in Venezuela.

With prodding from pro-Chávez unions, activists have surfaced periodically to file lawsuits in labor courts or demonstrate at Femsa facilities, demanding compensation for alleged infractions. The most recent demand was for a $520 million payment, which Femsa characterized as "illogical."

"This group has turned to illegal activities to pressure the company and achieve its goals," Rodrigo Anzola, Femsa's legal director in Caracas, said. Last week's disruption cost the company at least 1.7 million unit cases of beverages in lost sales, he said. He declined to disclose the value of the sales loss.

The senior diplomat accused Bimbo of financing Christian Democrat groups opposed to Mr. Chávez. The company didn't respond to the allegations, but Lorenzo Servitje, patriarch of the family that is its principal shareholder, vehemently denied them. "I am not an ultra-right wing Catholic," Mr. Servitje wrote in a letter to a Mexico City daily.

Bimbo's owners have a long history of aiding Catholic charities throughout Mexico, and have supported a Venezuelan philanthropy called Fé y Alegría (Faith and Happiness) for many years.

The Mexican multinational is a supplier to Venezuela's Mercal chain of state-owned supermarkets. In fact, with annual sales approaching $80 million, Bimbo has enjoyed real advantages over other Venezuelan local food producers, because its sugary snack cakes -- like Femsa's soft drinks -- largely are exempt from price controls because they are considered nonessential items.

While seldom threatened with outright expropriation, Mexican companies operating in Venezuela have complained of harassment. Both Bimbo and Femsa have been frequent targets of Venezuelan tax authorities, who stage lightning raids on corporate offices, usually shutting them down for 48 hours to conduct surprise audits.

"We've had two such incidents, once in 2004 and again in 2006," recalls Carolina Alvear, a Femsa spokeswoman in Monterrey. "They punish for the slightest cause. Once they cited us for having [sales] invoices filed out of chronological order."

The government has said its raids are aimed at eradicating tax evasion.

The pressures applied to Bimbo and Femsa recall those brought to bear on another Mexican food company, tortilla maker Grupo Maseca SA, or Gruma. In 2006, Gruma was induced to divest a slice of its profitable flour-milling operations in Venezuela after Venezuelan agencies imposed restrictions on imports of raw materials from Canada and the U.S. At the same time, Gruma's local unit found itself shut out of lucrative contracts for Venezuela's public sector, which shifted its purchases to ProArepa CA, a food conglomerate built by Ricardo Fernández Barruecos. Mr. Fernández, who declined interview requests, is a prominent member of a pro-Chávez businessman's circle known as the Boliburguesas, or Bolivarian Bourgeoisie.

Ultimately, Gruma sold a 40% stake in its Venezuelan unit to ProArepa for $65 million, to be paid in installments through the end of 2007. According to one financial analyst who follows Gruma for Wall Street firms, ProArepa has fallen behind on some $30 million in payments. A Gruma spokesman in Mexico City declined to comment on the transaction.

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