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Published On: Sat, Mar 18th, 2017

Venezuelan Bakeries Under State Control after Alleged Irregularities

nsnbc : Venezuelan authorities expropriated two bakeries in Caracas over alleged irregularities including the alleged misuse of subsidized flour for non-subsidized products and for defrauding consumers, among others. The controversial move pits those who claim Venezuela is the  “victim of an economic war” against those who believe an increasingly dictatorial PDSV government “seized” an opportunity to put bakeries under State / party control.

A "ruthless economic war against Venezuela" and "misuse of subsidized flour", or a "heavy-handed response to bakeries' coping with a failed Soviet-style economic model"? Depends on whom you are asking. Photo courtesy SUNDDE

A “ruthless economic war against Venezuela” and “misuse of subsidized flour”, or a “heavy-handed response to bakeries’ coping with a failed Soviet-style economic model”? Depends on whom you are asking. Photo courtesy SUNDDE

The two bakeries in the capital Caracas were allegedly caught selling under-sized bread loaves and rolls. William Contreras, the head of Venezuela’s consumer protection agency, SUNDDE stressed that bread is a basic food product and subject to price controls. Contreras claimed after an inspection of the bakeries “A loaf should weigh 180 grams. … These gentlemen here produce at 140 grams, and charge it as though it were 180″.

Mansion’s and one other bakery will consequently be “run by the state for at least three months” said Contreras. He added that both establishments will be “handed over to the CLAPs, a “government initiative aimed to curb food scarcity”.

SUNDDE inspected more than 400 bakeries across Caracas – allegedly following up on “consumer complaints”. The two busted bakeries were allegedly violating price controls, only baking at certain times of the day, creating lines of customers, and selling sub-standard bread rolls late in the workday. Contreras said the bakers should “ensure they have basic products available throughout the day” and that “production must be continuous”.

Sintra-Harina, Venezuela’s largest federation of bakeries denounced the seizure of the bakeries by the government as “heavy handed” and stressed that the government is not importing enough wheat. Sintra-Harina head Juan Crespo told reporters that Venezuela needs some 120 tons of wheat a day to satisfy consumer demand. He claimed current import rates aren’t meeting this target. He brought it to the point when he said “If you don’t have wheat, you don’t have flour, and if you don’t have flour, you don’t have bread”.

Other bakers denounced the demand that “production must be continuous” as preposterous. The only facilities where bread is produced 24 hours per day are bread factories, not small bakeries. Moreover, many are asking “when small bakeries run out non-subsidized flour for non-subsidized products, what are they supposed to do then, stop production all together – go bankrupt? – Be swallowed up by a Soviet-style state monopolistic capitalism under party control?”

However, the socialist PDSV government claims there is “enough flour to go around”. Contreras dismissed allegations about heavy-handed interference and fell back to the PDSV’s standard fallback position – blame other for a failed business model. Contreras accused bakeries of buying flour at subsidized rates and of then refusing to produce basic goods subject to price controls.

SUNDDE claimed inspectors found 52 sacks of subsidized flour in one bakery, and that only two out of ten were used to make subsidized products. An awkward use of statistics say some. However, SUNDDE has warned practices like this violate a law requiring bakeries to use at least 90 percent of subsidized flour to produce controlled products.

A/N & CH/L – nsnbc  18.03.2017

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