Politics, Business & Culture in the Americas

Empresas Polar Denies Accusations of Disrupting the Venezuelan Economy

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Update, May 15, 2013: President Nicolás Maduro and Lorenzo Mendoza, president of Empresas Polar, met last night and resolved their differences, with both pledging to work together to overcome any food shortages.

May 14, 2013 – Lorenzo Mendoza, head of Empresas Polar S.A., Venezuela’s largest privately-held food company, refuted government claims that his business is sabotaging the local food market. Mendoza’s comments came in response to President Nicolás Maduro’s accusations over the weekend that Polar is attempting to exacerbate food shortages and destabilize the economy by cutting output of staples like corn flour—which is used to make arepas, or patties, a staple in the Venezuelan diet.

In a press conference held in the company’s headquarters in Caracas on Monday, Mendoza said restrictive state regulations were the real cause of  Venezuela’s food shortages and that his company was being treated as a scapegoat.  While Polar controls 48 percent of the corn flour market, Mendoza explained that his company couldn’t be responsible for overall food shortages because it only accounts for 9 percent of total food consumption in the country.

The head of Polar said that the company increased its corn flour production and sales by 10 percent during the first four months of 2013, compared to the same period in 2012. He also announced that Polar is willing to buy or lease some of the state-owned production plants to increase local production of corn flour.

Venezuela’s scarcity index, which measures the amount of goods that are out of stock on the market, rose to 21.3 percent in April, its highest level since the central bank began tracking it in 2009. Inflation also jumped 4.3 percent last month, led by an increase in food prices. The combination of price controls, which analysts claim choke domestic output, together with government limits on accessing dollars further contributes to delays in acquiring raw materials.  The government is trying to solve both problems.  According to Finance Minister Nelson Merentes, accessing dollars will be resolved in the short-term, and the Venezuelan government plans to import 700 thousand tons of food from Mercosur countries to combat its food shortages. Brazil and Argentina are studying the possibility of emergency food sales to Venezuela.

Mendoza is scheduled to meet with President Maduro today. According to a statement on its company Facebook page, Polar said that it would attend all the meetings requested by the government and that it is willing “to cooperate with the search for solutions that favor the Venezuelan people.”

Tags: Empresas Polar, Lorenzo Mendoza, Nicolás Maduro, Venezuela, Venezuelan economy
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