Chavez threatens Polar with expropriation

[Bacchus39]

Chavez threatens Polar with expropriation The Associated PressPublished: March 7, 2009

http://www.iht.com/articles/ap/2009/03/07/business/LT-Venezuela-Polar.php

CARACAS, Venezuela: President Hugo Chavez on Friday warned Venezuela's largest food producer that its entire operations could soon be expropriated amid a personal spat between Chavez and its president.

Chavez accused Empresas Polar president Lorenzo Mendoza of personally "mocking" him, "attacking the government and disrespecting the country" — which Chavez said he considers grounds for expropriation. It was not clear what statements he was referring to.

"I'm going to take away all of Polar from you, down to the last plant you have," Chavez said in a televised speech.

If he were to follow through on that threat, his government would become the biggest player in Venezuela's food industry — potentially a key step in his plan to institute socialism.

Chavez has accused Polar and other companies of evading price caps on basic foodstuffs by producing less of those items, flouting new regulations that require price-controlled items to comprise at least 70 percent of their output. The rules aim to inflation, with food prices soaring 40.1 percent in Caracas and annual inflation reaching 30.1 percent last year, the highest in Latin America.

Today in Business with ReutersGermany at odds with U.S. over crisisMerck agrees to acquire Schering-Plough for $41 billionDow Chemical and Rohm & Haas reach deal to complete mergerNational Guard troops occupied a rice processing plant owned by a Polar subsidiary last week. Officials said they will to conduct a 90-day inspection to ensure the plant is producing enough price-capped white rice, as required under the new rules.

The subsidiary, Alimientos Polar, denied any violations on Friday, insisting that its plant is producing nothing but the required white rice.

Empresas Polar, owned by the Mendoza family, is one of Venezuela's largest companies, with 30,000 employees and 17 plants that produce and distribute everything from rice to vinegar and beer.

Four unions representing Polar employees have published a statement criticizing the government's rice-plant takeover, a move they said threatens to "to turn us into workers for a single boss, the state."

Chavez ordered the expropriation of another rice-processing plant owned by Minneapolis-based Cargill Inc. earlier this week.