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  HOME | Venezuela (Click here for more Venezuela news)

Venezuela Seizes Kellogg Facilities as Cereal Maker Abandons Caracas

By Carlos Camacho in Caracas

Embattled Venezuelan head of state Nicolas Maduro said workers were going to take over the factories of the former local unit of Kellogg, hours after the U.S. food giant announced it was quitting the country over worsening business conditions.

News of Kellogg quitting Venezuela after 56 years operating locally come only five days before a Presidential vote on Sunday, which the U.S. and the European Union have denounced as fraudulent and where Maduro is seeking reelection for another six years. The opposition has decided to abstain after it and its candidates were banned from running and is denouncing the rest of the candidates as Maduro stooges hired to endorse a rigged vote.

“The President of the Republic, Nicolas Maduro, informed that the workers in the Alimentos Kelloggs enterprise, located in Aragua state have assumed the reins of that company since this Tuesday,” oficial news agency AVN reported. During a public appearance Tuesday, Maduro again referred to the Kellogg shutdown saying it was “illegal and unconstitutional.”

Venezuela has been suffering under hyperinflation since October and prevalent shortages of food and medicine are giving way to a massive humanitarian crisis. Some 4 million Venezuelans have done like Kellogg and quit the country since the "Bolivarian Revolution" of Maduro and his mentor and predecessor Hugo Chavez began in 1999.

Tuesday morning, LAHT received a document, stating that Kelloggs was shutting down its Venezuelan unit, sacking its 600 local workers immediately from May 15th.

“We inform that Alimentos Kellogg S.A. (Kellogg Venezuela) has been forced to shut down operations in the country”, the statement said, adding, “there has been a material change in the entrepreneurial environment, including a turn for the worse in our access to key materials as consequence of the present restrictions.”

Venezuela has had price and currency exchange controls since 2003, restrictions that, coupled with declining oil prices between 2014-1017, led to a 37% drop in Gross Domestic Product since 2014, a fall steeper than that of the U.S. economy during the Great Depression of the 1930s. At the same time as the country prevented Kellogg from raising prices and/or having access to dollars, the country is undergoing hyperinflation clocked at 23,000% a year.

Even when forcing foreign companies to endure a near impossible business environment, Maduro (and Chavez before him) take every company quitting the company as a personal affront, of which there have been several hundred since 1999, according to Fedecamaras, the largest private-sector guild in the country. Other consumer product companies like General Mills, Kimberly Clark, and Clorox, airlines such as United and Delta, carmakers like GM and many others have all abandoned Venezuela in recent years, with the holdouts –- including Ford and Coca-Cola -- operating at a greatly reduced scale.


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