Thursday, May 13, 2010

Venezuela: State takes over food producer

The Venezuelan division of a Mexican-owned food company becomes the latest state seizure by president Hugo Chavez.

In a decree issued earlier today the government ordered the “forceful acquisition” of Molinos Nacionales CA, (Moneca), which is owned by Mexico’s Gruma SAB. According to the decree the expropriation would effect the production and storage of numerous Moneca foodstuffs such as pasta, spices, oil, and wheat. The aim of the takeover is part of a state plan entitled the "Strengthening of the Agro-industrial Processing Capacity for the 21st Century Socialism in Venezuela."

Gruma butted heads with the government in April when the firm accused officials of unfairly punishing Moneca over not selling flour. Last December authorities “declared a 90-day government receivership to control Monaca's operations and bank accounts” as a result of the company’s links to banker Ricardo Fernandez. Fernandez has been in jail after being accused of making approximately $846 million in illegal loans.

Today’s actions come in the midst of what the EFE news agency described as “nationwide food shortages”:
The move comes day after the government denounced that the problems of nationwide food shortages arise from “rumors” by the opposition designed to create “unrest” after against the government led by Chavez for the pas eleven years.

In recent months the Venezuelan government has taken over several food companies after accusing them of hording and price gouging. These firms are to fit within socialist production models as part of a plan for “food sovereignty.” – [ed. Translated text]
Gruma is the world’s top exporter of corn and flour tortillas and exports its products to over seventy countries.

Image- El Universal (Mexico)
Online Sources- El Universal (Mexico), El Universal (Venezuela), Bloomberg,, Reuters, AP, EFE

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