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Venezuela announces price controls as food shortages worsen

Shoppers wearing protective masks walk through the Coche market in Caracas, Venezuela, on , March 31, 2020.

CARLOS BECERRA/BLOOMBERG

By PATRICIA LAYA AND ALEX VASQUEZ | Bloomberg | Published: April 25, 2020

Venezuela's government set new price controls for more than two dozen products and announced the takeover of a cooking oil producer as food shortages in the countryside lead to protests and rioting.

Vice President Delcy Rodriguez said the government would also assume supervision of Empresas Polar, the national food giant and Venezuela's largest privately held company, headed by Chief Executive Officer Lorenzo Mendoza. Ham-maker Plumrose Latinoamerica will also be supervised.

"These companies were becoming speculative reference markers that were affecting the people," Rodriguez said in a televised news conference on Friday. "We must ensure that agreed prices are maintained and respected."

Empresas Polar rejected the measures as "arbitrary," adding that they will hurt its ability to supply food across the country, according to a statement.

"Despite the economic situation we face, plus the problems of supply of fuel and electricity, among others, we continue to produce and distribute quality food at prices adjusted to economic reality and in compliance with Venezuelan laws," Mendoza said in the statement.

Despite a six-week lockdown ordered by the government, more than 500 protests have been registered nationwide this month, in some cases resulting in looting and violence, as food and fuel become scarce.

While Venezuela's economy is heading for its seventh year of contraction, a recent easing of controls and an unofficial dollarization had put some life back into the economy. The government's latest moves are a reminder of the version of socialism that led to a toxic mix of expropriations, subsidies and currency control.

Price controls, first established by then-President Hugo Chavez in the early 2000s to contain inflation, led to devastating shortages of the basic goods being sold at a loss.
 

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