Vice President Delcy Rodriguez announced the measure on Friday as part of a slew of steps to try to control prices and slow inflation during the coronavirus pandemic, which together with an acute fuel shortage complicating the transport of goods is prompting a rise in consumer prices.
Inflation was 124% in the first three months of 2020, according to the central bank.
“There is no reason or justification for this arbitrary measure,” Empresas Polar’s chairman, Lorenzo Mendoza, said in a statement calling on the government to walk back the move targeting Alimentos Polar, the company’s food unit, which manufactures many Venezuelan staples including corn flour dough.
Venezuela’s information ministry, which fields media requests on the government’s behalf, did not respond to a request for comment.
The move toward price controls marks a shift away from a gradual liberalization of economic policy in the OPEC nation. In the face of U.S. sanctions imposed early last year, President Nicolas Maduro relaxed enforcement of decades-old price controls and eased restrictions on the use of foreign currency.
That has not been enough to turn around a six-year economic recession marked by hyperinflation, shortages of basic goods and a collapse in public services such as electricity and water. Gasoline shortages have grown worse in recent months, prompting sporadic lootings in eastern Venezuela last week.
The government also said it would supervise the sales of Plumrose, a meat producer, and a 180-day intervention at cooking oils producer Coposa. It also announced fixed prices on 27 basic products.
“This action is completely contrary to what the population expects at this moment,” Mendoza said in the statement. “It is a threat to the public and private supply chains the company serves. Far from calming the country down, it generates anxiety and panic.”
Source: Economy - investing.com
