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Thursday, February 15, 2007

Chavez threatens more nationalizations

CARACAS, Venezuela - President Hugo Chavez threatened Wednesday to nationalize any privately owned supermarkets and food storage facilities caught hoarding inventories or violating price controls imposed on basic goods.

Accusing private companies of hoarding beef and other foods, Chavez warned supermarket owners and distributors that he would nationalize their facilities as soon as they gave him "an excuse."

"If they remain committed to violating the interests of the people, the constitution, the laws, I'm going to take the food storage units, corner stores, supermarkets and nationalize them," Chavez said during a televised broadcast. "So prepare yourselves!"

Chavez has been intent on nationalizing "strategic" sectors of the economy since winning re-election in December. He has moved quickly to buy out private interests in leading electricity and phone companies since the National Assembly gave him authority to enact sweeping measures by decree and accelerate the country's socialist transformation.

Earlier this week the government signed deals to buy stakes in local companies owned by two U.S. corporations — Verizon Communications Inc and CMS Energy Corp. There are no major U.S. interests, however, involved in the supermarket or food storage business in Venezuela.

Chavez said his decree permitting takeovers of food stores and warehouses will take effect upon publication in the official gazette this week.

"The large storage installations, distribution chains, if we have to take them over and nationalize them, wait a few hours for the law to be approved," he said.

Industry officials blame shortages on price controls that oblige retailers to sell at a loss, while the government claims unscrupulous speculators, including supermarket owners and distributors, have been hoarding food to boost prices. Venezuela's consumer protection agency and National Guard have raided warehouses and confiscated tons of food they say vendors were unwilling to sell at the official price.

Jose Luis Betancourt, president of Venezuela's main business chamber, said Chavez's threat carried serious implications for the private sector.

"This is a veiled threat against any company, any business owner, any investor, any citizen," Betancourt told Globovision TV station.

He said the industry was ready to discuss food supply problems with Chavez if necessary, "but we can't work under threats and blackmail or boasts like this."

Industry and Commerce Minister Maria Cristina said the pending decree would give the Chavez government, working through municipal authorities and neighborhood councils, authority over food distribution and sales if private companies such as supermarket chains halt their operations.

Many privately owned supermarkets have suspended sales of beef, milk and sugar in recent weeks after one chain was temporarily shut down for hours for pricing meat above government-set levels. Most items can still be found, but only by paying higher prices at grocery stores or on the black market.
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