Venezuelan food firm tells Maduro government to boost output

CARACAS Mon May 13, 2013 4:09pm EDT

CARACAS May 13 (Reuters) - Venezuela's top food producer, Empresas Polar, on Monday challenged the country's socialist government to boost output of basic staples and ease nagging product shortages, rejecting accusations it is hoarding products to destabilize the economy.

Food supplies have become increasingly unsteady since late last year. Shoppers struggle to find corn, wheat flour and basic medicines - a constant complaint that could become a political liability for President Nicolas Maduro.

The president over the weekend said Polar, which makes products from beer to detergent, was intentionally cutting output to leave supermarket shelves bare and weaken his government through "economic war."

Polar President Lorenzo Mendoza, in a combative press conference, said the product shortages have been partly spurred by inefficiency of state-run companies nationalized during the 14-year-rule of late socialist leader Hugo Chavez.

"There's an immediate solution to this: Get the public sector (food production) plants running at 100 percent," Mendoza said, insisting Polar's output of products such as rice and corn flour were at maximum capacity.

He added the government should increase the regulated prices of food products that have in some cases forced companies to produce at a loss.

The late Chavez turned the state into a major player in the food industry through a wave of nationalizations, but many of those operations have struggled to maintain production after their takeover due to factors including labor disputes.

Business leaders now say months of delays in the country's currency control system have left them without dollars needed to import goods such as machine parts or grains such as wheat and corn, slowing food production.

Opposition leader Henrique Capriles said in an interview with local media that Maduro faces an "economic crisis with no exit," days after inflation hit a whopping 12.5 percent in the first four months of the year alone.

Maduro beat Capriles in last month's presidential election, triggered by Chavez's death, by 1.5 percentage points. The opposition has refused to accept the result, alleging fraud.

'HUNGER MARATHON'

Though food shortages are far from causing hunger, they have become a growing annoyance - particularly in the provinces.

Several videos circulating online show hundreds of people in the western city of Maracaibo last week being herded through a gate to buy chicken at a state-run supermarket.

Some of them break into a sprint, and one is heard shouting "This is the hunger marathon!"

One local newspaper in the city of Barquisimeto showed pictures of hundreds of people lining up outside a supermarket to buy corn flour, the main ingredient of the typical "arepa" corn pancakes. Some had numbers written in marker on their forearms to mark their place in line.

Mendoza on Monday offered to buy one of the government's corn flour plants to boost production, a veiled jab at nationalizations that critics say have weakened the economy.

"In 12 to 14 months we'll get it producing, our technicians are up to the job," Mendoza said.

The government says unscrupulous merchants are hoarding products to weaken the economy.

"There's an economic war intended to leave the country without supplies of products, to unleash inflation, to prevent international recognition of the government," Maduro said, apparently referring to the opposition's unsuccessful lobbying of regional governments to question his legitimacy.

He is slated to meet Mendoza on Tuesday.

The late Chavez took over large parts of the food industry through nationalizations ranging from an agricultural seed suppliers to rice and flour mills.

He also vastly expanded a network of subsidized state-run supermarkets that provide cheap groceries to millions of poor Venezuelans.

Chavez repeatedly threatened to take Polar over on charges of hoarding to worsening food shortages. But the company's products, which include Venezuela's most beloved beer, are prized among the working class. (Additional reporting by Diego Ore; Editing by Andrew Cawthorne and Cynthia Osterman)