President Hugo Chavez ordered Sunday the seizure of a French-owned retail chain following accusations that it raised prices after Venezuela devalued the currency by half.
“How long are we going to allow this to happen?” Chavez asked during his Sunday television program, in reference to the alleged price hike by Almacenes Exito SA, which is headquartered in Colombia and controlled by French retailer Casino Guichard-Perrachon S.A.
The Venezuelan leader said that a new law may be needed in order to carry out the nationalization. “I’m waiting for the new law to begin the expropriation process,” he said. “There’s no going back,” he added.
Almacenes Exito saw some of its stores closed this week by government authorities, following accusations that it was increasing its prices despite Chavez’s order that retailers were not to adjust prices after he devalued the currency to 4.3 bolivars per dollar from the previous rate of VEF2.15.
Almacenes Exito, which also runs Colombia’s largest retail chain, controls six hypermarkets and around 32 supermarkets in Venezuela.
Gonzalo Velasquez, Exito’s director of communications, said his company will not comment. He added that France’s Casino owns a majority stake in the Venezuelan supermarket chain.
In the past Gonzalo Restrepo, Exito’s Chief Executive, had said Exito had set apart COP45 billion (US$23 million) for its minority stake in the Venezuelan retailer to write off the assets if needed.
Separately, Chavez also ordered the nationalization of a large shopping mall recently built in a downtown district in Caracas. This mall, and the stores controlled by Exito, will be used to build up Comerso, a new government-run retail chain which aims to sell its products at “socialist” prices, according to the president.
During his eleven years in power Chavez has nationalized large swaths of the Venezuelan economy, including a Spanish-owned bank and an Argentine-controlled steel mill.
In some cases the government has reached a compensation agreement with the owners, while other companies, including Cemex SA and Exxon Mobil, are mired in international arbitration proceedings to secure payment for their nationalized assets.