Maduro Accuses Empresas Polar of Sabotaging Venezuela’s Economy

Venezuela President Nicolas Maduro accused billionaire Lorenzo Mendoza, the owner of the nation’s largest privately-held company, of exacerbating the worst shortages in at least four years and fueling inflation.

Empresas Polar SA, which produces everything from beer to rice, has cut output to make the economic situation worse, Maduro said yesterday, resuming a conflict with a company often rebuked by former leader Hugo Chavez.

“We have many signs that Polar has been cutting production and hiding products, pretending that nothing is happening, to create shortages of products such as pre-cooked corn flour,” Maduro said on state television. Corn flour is used to make arepas, or patties, a breakfast staple in the South American nation.

Venezuela’s scarcity index, which measures the amount of goods that are out of stock in the market, rose to 21.3 percent last month, the highest since the central bank started tracking the measure in April 2009. As shortages mount, inflation has accelerated, reaching 29.4 percent last month from 18 percent in November last year.

Brazil is studying emergency food sales to Venezuela, Marco Aurelio Garcia, foreign policy adviser to President Dilma Rousseff, said on May 9. Maduro this week visited Uruguay, Argentina and Brazil.

Maduro said he wanted to work with Polar to resolve the situation, while warning it to leave governing the country to him. He told Vice President Jorge Arreaza to arrange a meeting.

Polar said that it would attend the meeting and that it is willing “to cooperate with the search for solutions that favor the Venezuelan people,” according to a statement posted on its Facebook page.

Repeated Clashes

Chavez repeatedly clashed with Polar during his 14 years in power. In 2010, he threatened to nationalize the company, saying that it and Mendoza were waging a campaign to undermine his government. Mendoza and his family are worth about $4 billion according to Forbes magazine. Polar isn’t “indispensable,” Chavez said.

By the time Chavez died of an undisclosed type of cancer on March 5, his government had nationalized more than 1,000 companies or their assets.

Venezuela’s mounting economic problems come after Maduro won the April 14 presidential election by 1.49 percentage points, the narrowest margin in 45 years. Opposition leader Henrique Capriles Radonski is contesting the result in the Supreme Court, while the electoral council finishes an audit of the votes.

Dollar Shortages

After devaluing the bolivar by 32 percent in February, the new government has limited the supply of dollars to importers, deepening the shortages and pushing up the cost of goods that are available.

The authorities have only held one auction of foreign currency since introducing a new exchange system on March 27.

The bolivar has declined about 33 percent on the black market this year, according to Dolar Today, a website that tracks the exchange rate on the Venezuelan border with Colombia. The currency currently trades at about 26 per dollar on the black market, compared with 6.3 on the Cadivi system reserved for importers of essential items, such as medicine.

“I’ve got the precise information and demands so he gets on the ball, so he comes out to distribute the products, so he gets to producing,” Maduro said last night in an interview on the Telesur network. “You’ve got plenty of dollars, Mr. Lorenzo Mendoza, in case at some point there is some delay you have ways to cover it.”

To contact the reporter on this story: Jose Orozco in Caracas at jorozco8@bloomberg.net.

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net.

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