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Food Shortages Ignite Debate Between Empresas Polar And Government

posted 13 May 2013, 14:35 by Mpelembe   [ updated 13 May 2013, 14:36 ]

Venezuela's food giant Empresas Polar goes on the defensive after PresidentNicolas Maduro revives Chavez rhetoric and accuses the billion-dollar private company of hoarding staple items to destabilise the socialist government.

CARACASVENEZUELA (MAY 13, 2013) (REUTERS) -  Venezuela's leading beer and food company, Empresas Polar, rejected accusations from President Nicolas Maduro that the food giant was hiding basic staples to cause shortages and destabilise the leftist government of Hugo Chavez's heir, as the country experiences one of the biggest waves of food shortages in the last five years.

At a news conference in Caracas on Monday (May 13), Polar President Lorenzo Mendoza labeled the allegations against Venezuela's largest privately-held company as "crazy".

"We do not hoard, we do not hoard (food) and there is no possibility, none, that something like that can happen. It is crazy and irresponsible, we don't do it. In the control process of public bodies it cannot happen, we cannot control any product to the point of sale that does not have the approval of the Sada (The National Superintendent of Silos, Warehouses and Agricultural Storage)," said Mendoza.

Venezuelan state-run supermarkets are struggling to stock subsidised staple items such as flour, cooking oil and sugar.

The shortages are one of the early challenges for Maduro, who is facing a test of political legitimacy in the deeply polarised nation. Though anointed by Chavez as his successor in his last public speech, Maduro beat opposition candidateHenrique Capriles by only 1.5 percentage points in contrast to Chavez's 11 point victory over the same rival last year.

Using similar rhetoric to his former boss, Maduro blamed Empresas Polar for the shortages of some products and accused the company of cutting its output to overthrow the leftist government.

"They want to work in Venezuela, they're welcome, but you (Empresas Polar) are not going to rule over this country. You are not going to lead this country again, do your business within the law, pay your employees (according to) their collective contracts, job stability, pay your taxes. We are in a tradition. Now, if any of you think think that creating an economic war will defeat Nicolas Maduro, you're very far off the mark. Perhaps some of you who are trying to overthrow me could be overthrown. Careful, those who may be overthrown could be yourselves," he declared.

Maduro's critics say "Chavista" socialism is to blame for food shortages inVenezuela, blaming crippling price controls, rampant inflation and subsidised staples for creating distortions in the domestic market.

Last month, Polar defended its operations and said the company was producing at maximum capacity, while being hampered by inefficiencies in the release of dollars under Venezuela's strict currency restrictions and price controls on food items.

Looking to calm tensions, Polar called for dialogue with the government.

"I am following processes, this afternoon I will go to a meeting with all I've got for constructive dialogue, to listen, talk about anything they want to talk about, relating to the food sector, of pre-cooked flour or whatever they see fit within the economic framework. I don't want political talks, I'm not interested in politics," said Mendoza.

During his 14 years in power, Chavez had nationalised large swathes of the economy from oil companies to banks and miners in the name of his "21st century socialism." Maduro's predecessor and mentor had often threatened to nationaliseEmpresas Polar.

In 2011, the government expropriated land in the capital Caracas that Polar said was destined for the expansion of a children's nutrition program.

Polar is Venezuela's biggest private employer with 48,000 direct and indirect employees. It owns 30 factories and its products are distributed in 150,000 stores. It also distributes Pepsi-Cola (PEP.N) in Venezuela.