|
|
 |
|
Viewing report
|
|
|
|
Venezuela Food and Drink Report Q2 2010
Business Monitor International, March 2010, Pages: 79
The Venezuela Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Venezuela's food and drink industry.
At the start of 2010, the Venezuelan bolivar was devalued, with the government obliged to cut the value of its currency to improve the financial position of state oil firm PdVSA – one of the main sources of government revenues. The drawback of the move is the likelihood of stoking inflation, already the highest in Latin America, as the cost of imported goods will be higher. Finance Minister Ali Rodriguez has suggested that it may add 3-5% to the country's inflation rate, which averaged over 25% year-on-year (yo- y) in 2009. BMI believes that the effect will be more pronounced and we forecast headline inflation to have reached 40% by year-end 2010.
The high rate of inflation has the potential to erode living standards and is a major threat to Chávez's popularity. The president has therefore been gradually attempting to take control of large parts of food production and supply so as to keep a handle on prices. In 2009 the process was stepped up, with the government seizing control of assets belonging to US food giant Cargill and Mexican bread maker Gruma.
Marking the first time that the government has turned its attention to the retail sector, France-based Casino sold its 80% stake in Venezuelan retailer Cativen to the government of Hugo Chávez in February. In what has been described as a 'friendly' agreement, the group's six Exito hypermarkets, 35
Cada supermarkets and six distribution centres will now be operated by the government, which is set to use the network to sell staple products at subsidised prices. The network of outlets was first appropriated in January after the government warned of widespread 'speculating and price rises' following the devaluation. Other retailers in the country must now be concerned that such moves may indicate the start of a trend.
Mexican food producer Gruma announced in January that the government of Hugo Chávez had taken temporary control of one of its two Venezuelan
subsidiaries. Gruma has revealed that grain and biscuit producer Monaca will be run by state authorities for 90 days because a minority stakeholder has been linked to a local banking scandal. Although Gruma has suggested the move is only temporary, other supposedly temporary seizures in the Venezuelan food and drink industry have resulted in the government eventually assuming full control.
Although justification for the seizures has been attributed to a crackdown on financial corruption, the moves come at the same time as the government has openly expressed a desire to gain control of the country's food and drink industry. Persistent food shortages, which can be attributed to government imposed price-caps, along with the high cost of living, are a major threat to the government's popularity and Chávez is now becoming increasingly radical in his attempts to take control of Venezuela’s food production and supply.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
Customers who bought this item also bought
Venezuela Food and Drink Report Q3 2010
Venezuela Food and Drink Report Q4 2010
Venezuela Food and Drink Report Q2 2009
Venezuela Food and Drink Report Q3 2011
Venezuela Food and Drink Report Q4 2011
Venezuela Food and Drink Report Q1 2011
Venezuela Food and Drink Report Q4 2009
Venezuela Food and Drink Report Q3 2009
Venezuela Food and Drink Report Q1 2010
Venezuela Food and Drink Report Q2 2011
|
|
|
|
