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Venezuelan Troops Reclaim Coca-Cola for the Masses

The president accuses the soda and beer plants of hoarding as a strike causes shortages.

January 18, 2003|T. Christian Miller and Evelyn Iritani | Times Staff Writers

CARACAS, Venezuela — National guard troops commandeered plants belonging to the local bottling affiliate of Coca-Cola and another beverage company in Venezuela on Friday, as President Hugo Chavez stepped up his battle against private companies he accuses of participating in a strike that has crippled the nation.

Minutes after he took over the Coca-Cola plant with a squad of soldiers toting machine guns, Gen. Luis Felipe Acosta grabbed a locally produced malt beverage from a warehouse pallet, downed it and belched loud and long as television news cameras rolled.

"All of this is going outside," he said, waving his hand at the Coca-Cola and other canned drinks around him. "This is for the people."

Chavez had previously warned food companies that they would be subject to takeover as the strike resulted in shortages, but Friday's actions drew widespread condemnation.

By taking over Coca-Cola, Chavez also left himself open to accusations that he was aiming a blow at the United States. And although soda and beer have long been absent from grocery store shelves, so, too, have more basic products like flour.

"Coke isn't part of the basic national market basket," said Hermann Escarra, an anti-Chavez constitutional lawyer. "They have violated basic fundamental rights" in commandeering the plant.

The takeover of the plant belonging to Miami-based Panamco was only the second time that Chavez has taken over a private company during the country's debilitating 47-day-old strike. Previously, he has ordered troops to seize trucking firms to transport oil.

Chavez also sent in national guard troops to take over a bottling plant belonging to the Polar Group, a holding company that produces beer as well as bottled water and flour.

Acosta accused both plants of hoarding products needed by citizens, and said the law allowed the seizures.

The day's images juxtaposed the camouflage-clad foot soldiers of Chavez's left-leaning revolution with the famous red-and-white icon of the Coca-Cola Co.

Acosta mounted the running board of the first Coca-Cola delivery truck to leave the plant, located in Valencia, an industrial town in northern Venezuela. He said he planned to store the soft drinks in battalion headquarters before distributing them in the streets.

The guardsmen didn't say whether they were coming back to the plants targeted Friday but said they would go on to others.

The takeovers raised fears that the president would begin seizing other industries, including the country's private media, which are openly anti-Chavez. On Friday, Chavez's government filed suit against two national media companies, seeking fines against them for not broadcasting objective news.

U.S. Ambassador Charles Shapiro sharply criticized the plant seizures.

"This is an obstacle that disturbs relations," he said. "It's something I don't understand."

The takeovers Friday sends a clear message to foreign investors that their presence is unwelcome, which is likely to hasten the exodus of foreign funds and scare off future investment, according to William Reinsch, president of the National Foreign Trade Council, a Washington-based group whose members include the United States' leading multinationals.

"This tells investors it's not a stable country, not a stable economy, and if they're smart, they should get out," he said. "It's just exactly the wrong signal."

The seizures, done publicly with media cameras in tow and against two high-profile companies, were a clear warning to other businesses to give up the work stoppage, as well as a symbol of Chavez's determination to break the strike, which has cost the country $4 billion so far.

Venezuela's social conflict pits Chavez and his scattershot plans to better the lives of the country's poor against a widespread opposition whose members believe that the effort is driving the country into the ground.

The strike, backed by unions, business groups, the media and dissident military officials, was launched Dec. 2 and seeks to force Chavez to hold early elections. His term doesn't end until 2007. Chavez has said the opposition must wait until August, when the constitution permits a recall election.

The takeover of the Panamco and Polar plants was the latest blow against the opposition, which has become increasingly desperate and dispirited as Chavez manages to keep the country running even though the strike has nearly frozen oil production, the source of half the government's budget.

Venezuela supplies about 15% of U.S. oil imports, normally exporting about 2.5 million barrels a day. Chavez has managed to export between 500,000 and 800,000 barrels of oil a day during the strike, and preserve minimum internal gasoline supplies.

Each company affected Friday is tied to a powerful Venezuelan clan. The Mendoza family, headed by tycoon Lorenzo Mendoza, 36, listed by Fortune Magazine as the fifth-richest under-40-year-old in the world, runs Polar Group.

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