Venezuela nationalises retail chain

Caracas, Jan 19 : A day after Venezuelan President Hugo Chavez announced the expropriation of the foreign-owned Exito chain of hypermarkets for price manipulation, his trade minister accused another retailer of worse offences.

Cada, a locally owned supermarket chain, "is behaving worse" than Exito, Eduardo Saman said.

"Because (Cada) not only marks up prices, but speculates with basic food necessities and restricts the supply to make people believe there are shortages," the minister said on state television.

Chavez announced Sunday the imminent expropriation of Exito, owned by Casino Guichard Perrachon SA of Saint-Etienne, France and Almacenes Exito SA of Medellin, Colombia, for what he described as repeated instances of raising prices in defiance of government regulation.

The French firm holds 67 percent of Exito.

Last week, the leftist government closed 70 individual Exito and Cada stores for 24 hours, accusing them of increasing prices after a devaluation of the bolivar.

Officials said they would not allow retailers to boost prices on stock they acquired prior to the devaluation.

Under the new exchange-rate regime, importers of essential items such as food, medicine and heavy machinery can buy dollars at a rate of 2.60 bolivars to the greenback. The school supply and science and technology sectors, as well as public sector imports and remittances, also will be favoured by that rate, representing a 17 percent devaluation.

But a higher rate of 4.30 bolivars to the dollar applies to most of the economy, including the automobile, chemicals, rubber and plastics, appliances, textile, electronics, tobacco, beverages and telecommunications sectors.

The Exito chain "now belongs to the republic" and in that "there is no going back", Chavez said Sunday on his weekly radio and television programme.

Explaining the decision to nationalise the chain, Saman said Monday that "a refrigerator that they bought overseas for USD 300 or USD 400 is sold in Exito for up to USD 4,000".

The owners of Exito are also "associated with a supermarket chain, Cada", where that practice "is worse", he said.

"Cada is behaving worse, because there they are speculating with meat, with basic necessities," Saman said.

Among those rejecting the expropriation was the Caracas daily El Nacional, which attributed it to a "new phase of madness" of the government, which with all this is showing, it said, "the total fascist essence of the Chavez military ideology".

"Racist hate against any foreigner who dares to invest in Venezuela in the field of food distribution," the newspaper said.

The director of the Caracas Chamber of Commerce, Victor Maldonado, rejected Sunday Chavez's announcement and called on him to rectify and "apologise to the country instead of plunging deeper into these errors".

"The nationalisation of the hypermarket chain Exito is nothing but a way of sinking us into ruin" and exposes an economic policy that only creates "more unemployment, more distrust" in the country.