Venezuela’s government on Saturday said it was temporarily occupying the local subsidiary of multinational packaging company Smurfit Kappa, accusing the company of using its dominant position in the market to inflate prices.
In the run-up to Sunday’s municipal elections, Venezuelan President Nicolas Maduro’s government has launched an “economic offensive” to try to win over voters fed up with chronic shortages of basic goods and annual inflation of 54 percent.
Last week, Maduro said inspections of businesses would be stepped up and called for tough punishments for those accused of price gouging.
The opposition says his statist policies, and a decade of strict currency controls, are the problem.
Venezuelan Industry Minister Ricardo Menendez said the local subsidiary of Irish packaging group Smurfit Kappa had hiked prices for some food-related products by 372 percent in the last year.
“This company is being occupied temporarily to guarantee the provision of raw material for the food chain, everything related to the packaging, to guarantee the food produced in our country,” Menendez said on state TV from the company’s factory in the west-central state of Carabobo.
He said the government was not taking over the day-to-day running of the facility.
“The owners are responsible, before the country, to guarantee the maximum increase in production from this plant ... but the state will be here, vigilant, to make sure that no one sabotages our economy,” he said.
There was no immediate response to requests for comment sent to Smurfit Kappa.
It is not the company’s first collision with Venezuela’s socialist government.
In 2009, former Venezuelan president Hugo Chavez seized 1,500 hectares of forestry land owned by Smurfit Kappa, vowing to clear the trees and use the land for crops.
At the time, analysts said the company had about 30,000 hectares in Venezuela, representing 35 percent of the group’s Latin American landholdings, which represented 15 percent of Smurfit Kappa’s revenues.
Maduro, who has staked his leadership on preserving the legacy of his late mentor Chavez, alleged on Friday that price irregularities had been found at almost 99 percent of 1,705 businesses inspected so far this month.
Maduro’s administration accuses companies of marking up prices by as much as 1,000 percent over cost, though many retailers say they have been forced to increase prices due to lack of access to foreign currency at the official rate.
The president asserts that “capitalist parasites” are trying to wreck the OPEC nation’s economy and drive him from office.
The opposition denounces his latest theatrical economic moves as short-term populism and says they are coupled with incompetence that will only make things worse in the long run.