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Chavez to expropriate rice mill owned by Minneapolis-based Cargill
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According to the AP, "President Chavez of Venezuela ordered the expropriation of a rice-processing plant owned by American food giant Cargill, Inc. on Wednesday because the company allegedly was not distributing rice at prices imposed by the governement."
Pricing in Venezeula for products such as rice, chicken, and sugar are controlled by the government and must be clearly marked on packaging. 70-95% of a non-government owned companies' products must be products that fall under government price control laws.
Mark Klein, a Cargill spokesman in Minneapolis, said the company is respectful of the Venezuelan government's decision and expects an opportunity to clarify the situation.
"Cargill is committed to thte production of food in Venezuela that complies with all laws and regulations. The rice mill was designed excluseively to manufacture Parboiled rice, which is the company has dones at this site for the last 7 years and elsewhere in the country for 13 years." he wrote in a statement emailed to The Associated Press.*
From an article in the International Herald Tribune, a subsidiary of the New York Times:
"I warn you this revolution means business," said Chavez, whose government has struggled with lower oil income and minor food shortages this year.
The anti-U.S. president, who has nationalized swaths of the economy, is popular among the poor for pressuring companies to produce cheap goods and for government programs that provide subsidized food in city slums.
The moves to tighten the government's grip over the food supply were criticized by the private sector and many economists who say the state distorts the supply chain and contributes to food shortages.
Chavez, an ally of communist Cuba, recently seized some rice mills belonging to Polar, Venezuela's largest private business, after accusing the food industry of skirting his price controls and failing to produce enough cheap rice.
Chavez has often followed through on his nationalization threats, taking over oil, electricity, steel, cement and telecommunications companies. Sometimes, however, threatened companies have averted seizures by bowing to Chavez's demands.
It isn't yet clear if Cargill will have to make changes to the other 12 food processing plants throughout the country and remains fervent that they will "respect" the government's decisions and follow the law of Venezeula.
For more from the International Herald Tribune, click here: www.iht.com/articles/reuters/2009/03/05/america/OUKWD-UK-VENEZUELA-CHAVEZ-CARGILL.php
For more from the AP as reported by MSNBC, click here: http://www.msnbc.msn.com/id/29524732/
