We’re Not Going to Allow Shortages or Messing with Prices

VA.com note: The Venezuelan government continues its fight against price speculation, hoarding and sporadic shortages of certain products. Venezuelanalysis.com translates this interview with the president of Indepabis, the government’s consumer protection body charged with inspecting businesses and ensuring that companies abide by laws on price controls and other measures to guarantee the population’s access to goods and services.

The Institute for the Defence of People in Access to Goods and Services (Indepabis) is in the eye of the storm. The sanctions recently applied to commercial establishments both great and small have landed it in the headlines. Indepabis’ president, Consuelo Cerrada, explains that this is because they are developing two plans of inspection and price checking: one which began in January with the aim of combating artificial shortages generated by certain economic sectors, and the other which began after the economic announcements in February [principally, the devaluation of the bolivar from 4.3 to 6.3 bolivars to the dollar, which some expect to have a knock on effect on inflation and prices], to put a break on what she calls “messing with prices” [taking advantage of shortages by setting exorbitant prices on certain products, or using the devaluation as an excuse to increase prices to unjustifiable levels].

Indepabis isn’t alone in the flight. Another ten state institutions accompany it, between them the National Superintendent of Costs and Prices (Sundecop), the Exchange Rate Commission, (Cadivi), the National Tax and Customs Administration (Seniat), the Body of Scientific, Criminal and Penal Investigation (Cicpc), the Bolivarian National Guard, the Bolivarian National Police, and the Public Attorney.

Ciudad CCS: What are the most common violations or transgressions committed by traders?

Consuelo Cerrada: Deviations of routes to send products to border municipalities, presumably for contraband, goods without invoices, and tax evasion, among others.

Is the pace of supervision and sanctions in recent weeks sustainable in the long term?

We’ve sustained it and we hope that it’ll be permanent. This way of acting together (between different state institutions) allows us to attend to any irregularity or illicit act. If the problem is with taxes, it’s with Seniat, if it’s with the 19 products with regulated prices, Sundecop participates, and if there is contraband or illicit use, the National Guard or the Ministry of Interior Affairs steps in. We are dedicated to stopping actions taking place which act against the stability and tranquillity of the people.

What role does people’s power have in the functioning of these institutions?

The Venezuelan people’s level of consciousness is very elevated. They are no longer easily manipulated by small economic groups, but they need robust instructions that permanently accompany them in this struggle. In Indepabis we already have 3,500 monitoring committees for product supply, organised throughout the country, which means 15,000 people active. This support is very important because it constitutes an alert when product hoarding or price mark-ups are happening.

When merchandise is seized and a supervised sale is undertaken, does the business no longer receive the full profit?

If the irregular situation was sales at above the regulated price, we give the business the financial resources obtained from the sale at the correct price. It’s important to clarify this so that it’s not said that we abuse the trader or keep the profit for ourselves. However, when goods are seized for absence of invoices or deviation of route, the sale of the merchandise and the money generated goes to the national treasury.

The business owner says that the closure measure is abused…

That’s not true. Of those establishments inspected little more than 5% are sanctioned with closure, and a large part of those cases is for extreme insalubrity.

In recent days there have been closures of chains of non-essential goods and stores that operate in malls. Is this not to waste the supervision effort?

What’s happening there is that these actions form part of the other plan, which we began to develop after the government’s economic announcements [ie, the devaluation of the bolivar]. We’ve corroborated that some businesspeople went crazy, and they ended up messing with prices. Bit by bit they raised prices of products that were imported the year before [i.e. before the bolivar was devalued, not on the current official price of the dollar], with the argument that the dollar had a new price. As a government we cannot allow that. We’re not acting against the freedom of trade, but orientating these people so that they abide by the law, and understand that in Venezuela there are rules that must be fully respected. We’ve come across shameless illicit acts such as the lack of visible prices on merchandise, un-justified mark-ups, denial of satisfying demand by hiding merchandise in storage, and widespread usury. If a trader imported merchandise in 2012 with dollars granted by Cadivi [the government’s exchange rate commission] at 4.3 bolivars to the dollar and now tries to sell them as if they had imported them at 6.3 bolivars to the dollar, this means a profit margin of 80, 90 or 100%. It’s usury, it doesn’t have another name.

Some fanatic shoppers are annoyed because you closed Beco. [A Venezuelan department store closed by Indepabis for 72 hours last week]

We made a first visit there and we decided that there were exorbitant profits of 60 and 70% in some products and the withholding of others. We gave them a lapse of time so that they made adjustments and they said that they would, but when the moment arrived to lift the closure they hadn’t made them and this obligated us to prolong the sanction. Closure is a measure taken so that the irregularity is corrected. As long as the correction isn’t made, the closure is maintained.