Venezuela Food and Drink Report Q2 2009
Business Monitor International, April 2009, Pages: 62
The Venezuela Food and Drink Report provides independent forecasts and competitive intelligence on Venezuela's food and drink industry.
Despite the current problems facing Venezuela, per capita food consumption (food and drink, excluding alcoholic drinks) is expected to grow over the next few years. This is likely to be driven partly by increased prices owing to rocketing inflation but also by the continued redistribution of the country’s oil revenues to the poorer parts of the population. Per capita food consumption in US dollar terms is, therefore, expected to grow by 72.9% over the five-year forecast period, to reach US$1,092 in 2013, driven by the rapidly expanding population. However, although disposable incomes have grown in recent years, Venezuela’s economy looks vulnerable to falling oil prices, which could cause the state to cut back on welfare programmes, reducing purchasing power among the poorer segments of society.
With high levels of inflation in the economy, there are also concerns over rising food prices, which could cause discontent among poorer Venezuelans, who form the core of President Hugo Chávez’s support. Indeed, there are now fears that there could be a spate of nationalisations, in sectors such as food production. New laws declare that food production is a public good and gives the state the power to appropriate any goods that do not meet this standard. In essence, this gives the government the power to appropriate food producers without the approval of the National Assembly.
Indeed, at the beginning of March 2009, Chávez ordered military troops to seize control of rice processing mills in his latest attack on the country's private food sector. Chávez has accused producers of hoarding supplies and avoiding government imposed price caps and has warned that companies that do not comply with output demands could be permanently appropriated. Eleven companies, including Empresas Polar and Cargill have been targeted. Many producers claim that they are unable to make a profit while operating under price caps introduced some years ago, and resulting food shortages have led to numerous spats between the food sector and the government. These shortages, along with the high cost of living, are a major threat to the president's popularity and Chávez has become increasingly radical in his attempts to take control of the food industry. After a two-year-long nationalisation drive that has included energy, telecoms, steel and cement companies, Chávez now appears to be moving on to food production, one of the last strategic sectors of the economy still largely in private hands.
Venezuela is ranked in last place in the Business Environment Ratings for the Latin America region, due primarily to government-imposed obstacles such as price controls and import restrictions. The threat of state appropriation of leading producers is only likely to scare off interested investors further. Indeed, the latest episode with Chávez ordering military seizure of the rice processing mills owned by Empresas Polar and Cargill will only reinforce a trend to investment away from the country’s food and drink sector.
Executive Summary
SWOT Analysis
Venezuela Food Industry SWOT
Venezuela Drink Industry SWOT
Venezuela Mass Grocery Retail Industry SWOT
Business Environment
Latin America Food & Drink Business Environment Ratings
Table: Regional Food & Drink Business Environment Ratings
Venezuela’s Food & Drink Business Environment Ratings
Macroeconomic Outlook
Major Contraction Ahead
Table: Venezuela - Economic Activity
Food
Industry Forecast Scenario
Food Consumption
Venezuela Food Consumption Indicators - Historical Data & Forecasts
Confectionery
Confectionery Value/Volume Sales – Historical Data & Forecasts
Industry Developments
Market Overview
Overview of Sector
Prepared Food/Canned Food
Dairy
Meat
Seafood
Drink
Industry Forecast Scenario
Hot Drinks
Table: Hot Drink Value Sales - Historical Data & Forecasts
Alcoholic Drinks
Table: Alcoholic Drink Value/Volume Sales - Historical Data & Forecasts
Soft Drinks
Table: Soft Drink Value Sales - Historical Data & Forecasts
Industry Developments
Market Overview
Alcoholic Drinks
Soft Drinks
Mass Grocery Retail
Industry Forecast Scenario
Table: Venezuela Mass Grocery Retail - Value Sales by Format – Historical Data & Forecasts
Table: Sales Breakdown By Retail Format Type (%) – 2007 & 2017
Industry Developments
Market Overview
Table: Structure Of Venezuela's Mass Grocery Retail Market By Estimated Numbers Of Outlets
Table: Structure Of Venezuela's Mass Grocery Retail Market – Sales Value By Format (US$bn)
Competitive Landscape
Key Players
Food and Drink
Table: Key Players in Venezuela's Food & Drink Sector
Mass Grocery Retail
Table: Key Players in Venezuela's Mass Grocery Retail Sector
Company Analysis
Food
Alimentos Heinz CA
Cargill de Venezuela
Empresas Polar
Drink
Coca-Cola FEMSA
Pernod Ricard Venezuela
Mass Grocery Retail
Mercal CA
Makro Venezuela
Cativen
Appendix
Country Snapshot: Venezuela Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Food & Drink Business Environment Ratings
Ratings Methodology
Ratings Overview
Ratings System
Indicators
Limits Of Potential Returns
Risks To Realisation Of Potential Returns
Weighting
Weighting
The Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
The Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing
- Alimentos Heinz CA
- Cargill de Venezuela
- Cativen
- Coca-Cola FEMSA
- Empresas Polar
- Makro Venezuela
- Mercal CA
- Pernod Ricard Venezuela
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