Venezuela takes temporary control of 2 sugar mills, alleging ‘hoarding’ amid price controls

By Fabiola Sanchez, AP
Tuesday, March 9, 2010

Venezuelan officials take control of 2 sugar mills

CARACAS, Venezuela — Venezuela’s government seized control of two sugar mills Tuesday and threatened to expropriate them, accusing managers of hoarding a basic good and violating the labor rights of employees.

Commerce Minister Richard Canan said authorities were taking over management of the Santa Elena and Santa Clara mills in the central state of Portuguesa for 90 days “to guarantee the operations of the mills, so our people don’t go without sugar.”

Canan said inspectors found several tons of sugar in warehouses that “should be in distribution centers.” He suggested the mills failed to ship the sugar on schedule — a violation of laws aimed at ensuring timely distribution of basic foods as a means protecting consumers.

Government inspectors claim some businesses hoard sugar and other foods subject to government-price controls, waiting for President Hugo Chavez’s administration to raise prices before selling the goods.

The government raised the price of sugar by 30 percent Tuesday. Sugar — one of dozens of foodstuffs subject to price controls — has become scarce at some stores and supermarkets.

Canan threatened mill owners who fail to observe regulations with possible expropriation of the businesses.

“We can use the expropriation process against sugar mills if they don’t comply with the correct operational capacity of the plants and the prices established by the government,” he said.

Canan said officials also found “irregularities in the payment of the workers” at the two mills as well as several violations of safety and environmental protection regulations. He did not elaborate.

An executive at the company operating the mills rejected the accusations of hoarding and other charges, telling The Associated Press the sugar in the warehouses was processed only five days before the inspection. The executive spoke on the condition of anonymity during a telephone interview because he was not authorized to publicly discuss the allegations.

The mills are owned by Suhel Turman, a Guatemalan businessman.

Jose Ricardo Alvarez, president of the National Federation of Sugar Growers, said Tuesday’s sugar price increase would do little to help mill owners who are struggling to turn a profit due to price controls.

will not be displayed