Venezuela seizes plant of US food giant Cargill

May 15, 2009 19:07

Venezuelan President Hugo Chavez's government seized temporary control of a pasta-processing plant owned by US food giant Cargill Inc. on Friday, arguing the company broke regulations on food items subject to price controls. Venezuelan soldiers accompanied Deputy Food Minister Rafael Coronado and other government officials as they arrived at Cargill's plant in the coastal state of Vargas. Coronado said "there was a clear transgression of the law," referring to legislation that aims to control inflation by requiring companies to ensure that 70 percent to 95 percent of their products are the types that fall under the government-imposed price controls. The government claims the controls are needed to stem double-digit inflation, but businesses argue they make it difficult to turn a profit because income from retail products isn't much more than they pay for raw ingredients used for production. Authorities will seize control of Cargill's pasta plant for a 90-day period, Coronado said.

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