Mérida, December 7th 2011 (Venezuelanalysis.com) – Since confronting Italian company Parmalat over its hoarding of milk last week, and fining Swiss transnational Nestle for the same, the Venezuelan institution Indepabis has announced that it is going on the offensive to get hoarded milk to the people.
President of Indepabis (Institute for the Defence of People’s Access to Goods and Services) Consuelo Cerrada announced today that the organisation is working with the Bolivarian National Guard to “put an end to the informal chains of distribution”.
In Merida powdered milk and cooking oil have been almost impossible to find at regulated prices since January, while in Caracas those goods are occasionally available, but coffee is also scarce. They are sometimes available on the black market at double the normal price.
Cerrada said Indepabis also needed the grassroots in order to fight speculation and hoarding. Indepabis has asked communal councils to form auditing committees, however only the more organised communal councils have been able to do so.
On November 26, after the government seized 210 tonnes of hoarded powdered milk from its Merida warehouse, Parmalat put out a statement declaring the measure “strange” and arguing the milk was supposedly destined to state company CASA.
The next day president Hugo Chavez responded to the statement, “We found Parmalat hoarding milk and this is typical of the bourgeoisie … they think we are fools or idiots … Gentlemen of Parmalat, we are not stupid!”
He ordered a large-scale investigation into the company and reminded Parmalat that his government has the power to expropriate the company if it continues carrying out such actions.
He also explained that actually CASA, as a state company, imports milk then delivers it to private companies to be processed and distributed. According to Chavez the problem was that later the private companies hoarded the milk in order to create artificial shortages, with two objectives, “as a way of making the government look bad, and as an economic strategy to force the raising of prices”.
Parmalat issued a public apology on 29 November, saying, “On this occasion we offer our most sincere apologies for not having achieved our objective as a company and adequately communicating what happened in the specific case of the quota of commissioned milk...we don’t want to distort the efforts of your honourable government ...towards the national supply of foods and the protection of consumers... we regret the unease created by our [previous] statement”.
Nestle and other milk hoarding
Major general Luis Motta Dominguez also announced last week that the Bolivarian National Guard and Indepabis had discovered a further 260 tonnes of milk in various states of the country. He explained that they had found large quantities of hoarded goods stored near municipal markets.
Further, Indepabis gave Swiss transnational Nestle a fine of 5,000 tax units, or Bs 375,000 (US$ 87,000) last week for hoarding 25 tonnes of powdered milk.
Indepabis coordinator in Anzoategui state, Arquimedes Barrios, said the representatives of the company argued that the milk hadn’t been distributed because they lacked freight trucks. However, according to Barrios, when the Bolivarian National Guard sent ten of its trucks to help with the distribution, ten of the company’s own trucks appeared.
Indepabis has said it will continue monitoring the Nestle branch in Anzoategui and guaranteeing the distribution of its products to the population.
National government aiming to guarantee milk supply
According to Maikel Reyes, dispatch director of the Andean liquid milk company, Enlandes, which the government nationalised in 2008, the company’s production has increased from 17,200 litres per day in 2008 before nationalisation, to 308,895 litres per day currently.
Reyes blamed the originally low production on the private company’s policy of “disinvestment, developed to provoke scarcity and in that way, increase prices of its products and its profits”.
According to land and agriculture minister Juan Loyo, the government increased local milk production by 50% between 1998 and 2010.
The recent measures taken by the government to prevent hoarding and to distribute hoarded goods to the population come as it is applying the new Law of Costs and Fair Prices, passed last month by the National Assembly.
The law aims to prevent price speculation on consumer goods, and enables the government to limit prices charged for goods and services. The government is currently in the first phase of implementing the law, which involves inter-institutional auditing of companies’ internal pricing structures of personal hygiene, food, and household products. It will set a maximum selling price for those products on 15 December, and companies will have one month to print the price on the products.