Tag Archives: Lorenzo Mendoza

May
13
2013
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With the Economy in Dire Straits, Maduro Scapegoats a Beloved Venezuelan Company

pan0.jpg.520.360.thumb e1368469039817 With the Economy in Dire Straits, Maduro Scapegoats a Beloved Venezuelan Company

Courtesy of: El Universal

Nicolás Maduro and his socialist government cannot claim that they were not warned. Economists have long predicted that a Venezuelan economy propped up by excessive borrowing and an unsustainably high oil market would collapse spectacularly. Hugo Chávez, his cancer kept at bay just long enough to secure reelection, spent enough borrowed money in his final months to postpone the crash until Maduro had taken control. But the reckoning was inevitable. Now Maduro, eager for a scapegoat, is intensifying his attacks on the private sector, taking aim at Venezuelans’ most beloved company: Empresas Polar.

Polar is a pillar of the Venezuelan economy, producing staple goods from cornflour to household supplies and the nation’s most popular beer. Maduro issued his latest threat against the company on Saturday, when he accused the company of economic “sabotage” and demanded company President Lorenzo Mendoza to appear before the government to “explain the situation.” It was the latest in a series of escalating rhetoric against Polar, and a disturbing sign that Maduro refuses to learn the lessons inflicted on Venezuelans by years of failed socialist policies. Mendoza is scheduled meet with Vice-president Jorge Arreaza on Monday and with Maduro on Tuesday.

In a press conference held on Monday before the scheduled meetings, Mendoza addressed Maduro’s statements. He noted that Polar’s cornflour brand, PAN, operates at 100 percent capacity, but has only a 48 percent stake in the Venezuelan market, making it impossible to meet the country’s full demand. Thus far this year, Polar has produced 10 percent – 15,000 tons – more than last year. The remaining 52 percent of the market is comprised primarily of government-owned businesses, which are producing at less than 40 percent of their capacity. In response to Maduro’s accusation of “hoarding,” Mendoza stressed that Polar simply cannot hoard products to begin with since every step of the production and distribution process is regulated by government overseers.

As economists have noted, the shortages and inflation Maduro blames on the private sector are in fact caused by the government’s own policies. Rampant expropriations, price controls and other heavy-handed policies have harmed business and left farmland idle, sapping more than 11 percent from the country’s gross domestic product between 2005 and 2010.

Inflation is soaring, the nation’s debt continues to mount, and a currency devaluation has crippled Venezuelan’s purchasing power. As What’s Next contributor Joel Hirst observed, the economic crisis has left Maduro in the “awkward position of blaming Venezuela’s hobbled private sector for the failure of his own socialist policies.” The Central Bank’s scarcity index for Venezuela, which measures the percentage of goods unavailable in the market, rose to its highest number since it began tracking in April, 2009.

The facts, of course, could not be clearer. The company persevered under the yoke of Chávez’s policies, and continues to provide the goods Venezuelans need even as government controls force Polar and other companies to operate at a loss. These private companies are Venezuela’s best hope for brighter economic days; Maduro, in a desperate bid to save his own political skin, has chosen to marginalize them even further. It is ordinary Venezuelans, however, who will suffer the consequences.

 
Jul
28
2010
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Political Beer in Venezuela: Chávez Looks to Nationalize Major Brewery

12polar Political Beer in Venezuela: Chávez Looks to Nationalize Major Brewery This article was originally posted by Toward Freedom

Venezuela has the highest per capita consumption of beer in Latin America, clocking in at 90 liters per person annually. Empresas Polar, one of the largest breweries in the country, is currently in the crosshairs of President Hugo Chávez, who would like to put the company under state control.

Since becoming president in 1999, Chávez has nationalized numerous industries, from the oil sector to Venezuelan operations of the US agricultural and food corporation Cargill.

Now, Chávez has his sights on Polar, a major beer and food producer. The move is part of a government strategy to stem food shortages and decentralize corporate wealth to benefit the majority of Venezuelans.

Venezuelan billionaire Lorenzo Mendoza, the owner of Polar, placed (with his family) in 125th on Forbes Magazine list of the global wealthy.

“I’m not afraid to nationalize Polar, Mendoza, so be careful,” Chávez said. “Let’s see who lasts longer — you, with your Polar and your riches, or me, with my people and the dignity of a revolutionary soldier.”

Sending a clear signal to Polar, which is also the distributor of Pepsi Cola in the country, Chávez ordered the company to remove a massive globe-shaped Pepsi advertisement from a high-rise building in downtown Caracas. The Chávez government also moved to expropriate a Polar warehouse outside of Caracas to turn it into a space for public housing.

In one verbal attack against the billionaire, Chávez said, “Come down from your cloud, Mendoza. Here in Venezuela… We’re done with the sacred cows.”

 
Jun
23
2010
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How long can chavismo continue to ride the wave of its own mythology

This blog entry was first published by vheadline.com, and its author explains how Polar is a staple in Venezuela´s family lives.

In another inversion of leftist determinism, an attempt by Chavez’ embattled administration to expropriate Venezuela’s largest remaining private company was thwarted earlier this month, in part due to organised opposition by employees looking to protect both their jobs and their hard-won working conditions.
Empresas Polar is as central to Venezuelan capitalism as Coca Cola or Ford are to the American version. Its principal product is Polar Light, a tastelessly diluted beer — served ice cold, much to the delight of the overheated Venezuelan — but they also make Maltin (a fizzy malt drink which is possibly the nation’s favorite soft drink) and Harina Pan (maize flour, from which the staple foods of the arepa and empanada are made), amongst other things. Their products are to be found in every Venezuelan home, and are consumed on a daily basis by pretty much every single Venezuelan. Moreover, the bizarre logo (a polar bear on an ice cap, somewhat incongruous in the Caribbean tropics) also benefits from a visual ubiquity — on t-shirts, at sporting events and advertising billboards — that is matched only by the various red logos of chavismo. Add on the fact that one of Polar’s biggest clients is Mercal, the state-subsidized food market, and the mutual hostility between the nation’s two most powerful bosses suddenly becomes somewhat inevitable.
In the last few months, in the now familiar fashion of the chavista administration, moves were made to prepare for a state seizure of the assets of Venezuela’s largest remaining private company. In April, a warehouse was closed down by the military in Barquisimeto, Lara state, with all the products being seized to be distributed by PDVAL — a state programme in which petrol dollars are used to distribute foodstuffs and basic goods throughout the country. Chavez accused the company of hoarding its products in order to enforce shortages and price inflation, while Polar replied that it had found its business operations compromised and undermined by the electricity crisis (industry has been subject to strict power rationing, with many being fined for “over-consumption”). The raid brought a sense of deja vu to those who remembered the anti-chavista business lockout of 2003, in which a Polar warehouse was amongst those seized by the government.
After the Barquisimeto raid came the verbal threats, with Chavez warning Lorenzo Mendoza, Polar’s multimillionaire owner, “don’t provoke me … stay quiet and don’t get mad,” on live TV, before claiming he “wasn’t afraid” to nationalise the company. Venezuelans — who had already seen a series of supermarkets nationalised this year under the same rubric — prepared to watch another company change name and…well, little else really.
However, the Polar workers had done their maths. As a result of the seizure in Lara, 450 workers had lost their jobs, and justifiably, the rest of the 30,000-strong Polar workforce was similarly perturbed. Even those who wouldn’t lose their jobs following nationalization had cause for concern as to the recognition of their collective contracts and right to union affiliation (after all, as one chavista infamously said in defense of firing union activists in a state-run factory, “under socialism, there are no unions”). A long tradition of workplace struggle within Polar factories had granted workers “the best benefits in the country,” in the words of one worker in El Tigre, Anzoategui state, and it looked likely the cash-strapped state would slash their gains, prioritising shoring up the near-nonfunctional PDVAl (more on that later).
As government inspectors suddenly started to perform all manner of spot checks on Polar factories and warehouses, searching for a legal pretext with which to execute seizure, demonstrations were organized by workers, and most major towns saw ‘caravanas’ (motorised processions of tooting horns) of Polar workers in their private cars. Their slogan was “SI SE PUEDE,” an audacious challenge to the government’s strength. In the end, on 12 June, the Polar workers were proved right, as the government was forced to retreat, suddenly calling reports of a planned government expropriation of Polar “totally false and irresponsible … a right wing tactic,” etc, etc and confirming that it would not happen after all.
Of course, the workers’ protests were not the sole cause of the government’s capitulation. Simultaneous to the workers’ protests — and a considerable level of public outcry over the Polar question — the state had become wrapped up in yet another crisis that ultimately proved to be fatal for their plans. Having spent much of 2010 raging against the hoarding of foodstuffs that should be in people’s homes, it suddenly emerged that — with figures being constantly revised upwards to account for reports emerging from all corners of the Bolivarian Republic — over 120,000 tonnes of products have gone rotten and been disposed of while under PDVAL supervision in the last month alone. In a country with widespread shortages which PDVAL is supposed to combat, if that food had been delivered onto plates, it is estimated that in the same time period, it would have fed more than 17 million people (out of a national population of 26 million)!
The hypocrisy of Chavez’ crusade against the wastefulness of private Venezuelan industry — his carrot for the stick of Polar’s nationalization — was laid bare for all to see, and another defeat was inflicted on the beleaguered chavista regime.
So what next then, now that the Polar workers’ contracts are safe — for the time being, at least? Well, even though they’re in a better position under Polar than under the state, that’s no reflection on the generous character of the elitist Mendoza. Throughout the expropriation saga (or “soap,” as one commentator called it), a group of former Polar employees have been demonstrating, demanding payment of the much-vaunted benefits. Indeed, at one point, the government attempted to piggyback on the struggles of Polar workers against their company as an argument for nationalization, to no avail.
The culture of workers’ struggle — regardless of the color of their boss’ shirt, or the logo it carries — will have to continue in order to maintain their conditions.
Moreover, the endemic inefficiency of PDVAL — in a time of chronic food shortages and an almost unpredecedently grave economic crisis — has been proven, once and for all.
A system in which some 70% of foodstuffs are imported (largely thanks to the collapse of the national agricultural economy), only for 70% of it to be rendered inedible, cannot claim to have the people’s best interests at heart.

In another inversion of leftist determinism, an attempt by Chavez’ embattled administration to expropriate Venezuela’s largest remaining private company was thwarted earlier this month, in part due to organised opposition by employees looking to protect both their jobs and their hard-won working conditions.

Empresas Polar is as central to Venezuelan capitalism as Coca Cola or Ford are to the American version. Its principal product is Polar Light, a tastelessly diluted beer — served ice cold, much to the delight of the overheated Venezuelan — but they also make Maltin (a fizzy malt drink which is possibly the nation’s favorite soft drink) and Harina Pan (maize flour, from which the staple foods of the arepa and empanada are made), amongst other things. Their products are to be found in every Venezuelan home, and are consumed on a daily basis by pretty much every single Venezuelan. Moreover, the bizarre logo (a polar bear on an ice cap, somewhat incongruous in the Caribbean tropics) also benefits from a visual ubiquity — on t-shirts, at sporting events and advertising billboards — that is matched only by the various red logos of chavismo. Add on the fact that one of Polar’s biggest clients is Mercal, the state-subsidized food market, and the mutual hostility between the nation’s two most powerful bosses suddenly becomes somewhat inevitable.

In the last few months, in the now familiar fashion of the chavista administration, moves were made to prepare for a state seizure of the assets of Venezuela’s largest remaining private company. In April, a warehouse was closed down by the military in Barquisimeto, Lara state, with all the products being seized to be distributed by PDVAL — a state programme in which petrol dollars are used to distribute foodstuffs and basic goods throughout the country. Chavez accused the company of hoarding its products in order to enforce shortages and price inflation, while Polar replied that it had found its business operations compromised and undermined by the electricity crisis (industry has been subject to strict power rationing, with many being fined for “over-consumption”). The raid brought a sense of deja vu to those who remembered the anti-chavista business lockout of 2003, in which a Polar warehouse was amongst those seized by the government.

After the Barquisimeto raid came the verbal threats, with Chavez warning Lorenzo Mendoza, Polar’s multimillionaire owner, “don’t provoke me … stay quiet and don’t get mad,” on live TV, before claiming he “wasn’t afraid” to nationalise the company. Venezuelans — who had already seen a series of supermarkets nationalised this year under the same rubric — prepared to watch another company change name and…well, little else really.

However, the Polar workers had done their maths. As a result of the seizure in Lara, 450 workers had lost their jobs, and justifiably, the rest of the 30,000-strong Polar workforce was similarly perturbed. Even those who wouldn’t lose their jobs following nationalization had cause for concern as to the recognition of their collective contracts and right to union affiliation (after all, as one chavista infamously said in defense of firing union activists in a state-run factory, “under socialism, there are no unions”). A long tradition of workplace struggle within Polar factories had granted workers “the best benefits in the country,” in the words of one worker in El Tigre, Anzoategui state, and it looked likely the cash-strapped state would slash their gains, prioritising shoring up the near-nonfunctional PDVAl (more on that later).

As government inspectors suddenly started to perform all manner of spot checks on Polar factories and warehouses, searching for a legal pretext with which to execute seizure, demonstrations were organized by workers, and most major towns saw ‘caravanas’ (motorised processions of tooting horns) of Polar workers in their private cars. Their slogan was “SI SE PUEDE,” an audacious challenge to the government’s strength. In the end, on 12 June, the Polar workers were proved right, as the government was forced to retreat, suddenly calling reports of a planned government expropriation of Polar “totally false and irresponsible … a right wing tactic,” etc, etc and confirming that it would not happen after all.

Of course, the workers’ protests were not the sole cause of the government’s capitulation. Simultaneous to the workers’ protests — and a considerable level of public outcry over the Polar question — the state had become wrapped up in yet another crisis that ultimately proved to be fatal for their plans. Having spent much of 2010 raging against the hoarding of foodstuffs that should be in people’s homes, it suddenly emerged that — with figures being constantly revised upwards to account for reports emerging from all corners of the Bolivarian Republic — over 120,000 tonnes of products have gone rotten and been disposed of while under PDVAL supervision in the last month alone. In a country with widespread shortages which PDVAL is supposed to combat, if that food had been delivered onto plates, it is estimated that in the same time period, it would have fed more than 17 million people (out of a national population of 26 million)!

The hypocrisy of Chavez’ crusade against the wastefulness of private Venezuelan industry — his carrot for the stick of Polar’s nationalization — was laid bare for all to see, and another defeat was inflicted on the beleaguered chavista regime.

So what next then, now that the Polar workers’ contracts are safe — for the time being, at least? Well, even though they’re in a better position under Polar than under the state, that’s no reflection on the generous character of the elitist Mendoza. Throughout the expropriation saga (or “soap,” as one commentator called it), a group of former Polar employees have been demonstrating, demanding payment of the much-vaunted benefits. Indeed, at one point, the government attempted to piggyback on the struggles of Polar workers against their company as an argument for nationalization, to no avail.

The culture of workers’ struggle — regardless of the color of their boss’ shirt, or the logo it carries — will have to continue in order to maintain their conditions. Moreover, the endemic inefficiency of PDVAL — in a time of chronic food shortages and an almost unpredecedently grave economic crisis — has been proven, once and for all.

A system in which some 70% of foodstuffs are imported (largely thanks to the collapse of the national agricultural economy), only for 70% of it to be rendered inedible, cannot claim to have the people’s best interests at heart.