Hugo Chavez Nationalizes French-Owned Supermarket Chain
January 18, 2010
(ChattahBox)—-Venezuela’s strongman President Hugo Chavez, has been busy since his devaluation of the country’s currency, closing down shops for price gouging. But on Sunday he went one step further and nationalized the supermarket chain Exito, which is owned by a French company. It “will now belong to the republic,” said Chavez during his weekly address. This move doesn’t bode well for other multinational companies operating in Venezuela, which is undergoing soaring inflation.
Before Chavez made his grab of the supermarket chain, authorities moved in and closed the stores for illegally raising prices. “Because of multiple violations of Venezuelan laws the Exito chain will now belong to the republic, there is no way back,” Chavez said.
Chavez told his country that the Exito supermarkets had increased prices without justification. The Exito chain is run by Colombian retailer Alamcenes Exito IMI.CN, which is owned by France’s Casino.
Chavez devalued the bolivar currency on Jan. 8 to boost the troubled country’s credit rating, by reducing the deficit. But the increasing inflation could rise to 60 percent, by some estimates, placing Chavez in a precarious position with his mostly poor constituents. To show his supporters he is clamping down on inflationary prices, Chavez deployed troops to monitor the prices in shopping districts. Soon after the devaluation, officials had temporarily closed 70 stores of the 96 that were inspected for “incurring in price markups and speculation.”
And panicked consumers rushed to electronic stores to buy flat screen TVs and other electronic merchandise, before the prices became out of reach for the average consumer in the poor country.
Chavez has already nationalized major portions of the country’s economy, since he has been in office for over a decade, including oil projects, electricity and telecommunications companies.