Chavez continues to exert pressure on Pepsi and Coke

According to United Press International, Chavez announced on Sunday weekly TV and radio program that some private companies involved in food processing and packaging in the Latin American country would be nationalised and, in addition, international companies would have their water use reviewed by the government as part of a widening state influence over the economy.

Chavez was reported as saying that the beverage giants are privatizing water in their production processes and given that water is social property, he continued, their actions in this respect should be reviewed.

The Venezuelan leader also said that he has approved decrees for the forced acquisition of two firms – aluminium can producer Alentuy and Envases Internacional, a producer of containers for the food industry.

Among the other firms targeted for take over by the state are distributors and wholesalers of food that were accused by the president of stockpiling food supplies and violating price controls.

The government claims such moves are a way of ensuring protection for Venezuelans from price inflation of staple foods.

In a report last May on investment opportunities for food manufacturers in Latin America, specialist market research organization Leatherhead Food International said that leading food and beverage groups have been turning to the countries in regions such as Latin America in order to maintain profitability, and have appeared keen to access new customer bases whilst also taking advantage of lower labour costs.

However they noted then that Venezuela is “perhaps the only unattractive market within the region”.​

Although the country has a relatively high per capita gross national income of $11,920, Leatherhead based its assertion on the continuing government conflict with business, and evidence of large-scale nationalization, particularly the seizure of food production plants such as the Cargill rice processing facility last May.

Chavez won a referendum last February allowing him unlimited terms in office as long as he continues to win elections.