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Franco-Colombian supermarket chain to be nationalised

Text by News Wires

Latest update : 2010-01-18

Venezuelan President Hugo Chavez announced on Sunday that his government would expropriate the Franco-Colombian supermarket chain Exito ahead of the official devaluation of the bolivar currency on Monday.

AFP - President Hugo Chavez on Sunday said the government would expropriate the Franco-Colombian supermarket chain Exito for price speculation, in the wake of the devaluation of the national currency, the bolivar, last week.

"The Exito chain, on grounds of numerous violations of Venezuelan laws, will belong to the Republic," Chavez said on his weekly, radio and television show "Alo Presidente."

He said he had ordered Congress to quickly pass a new law for the nationalization of Exito, which he hoped would become a "sword" against any retailer who raises his prices to "speculative" levels.

The Exito chain is majority owned by French group Casino and has branches in several Venezuelan cities. It sells everything from food to home appliances.

Chavez a week ago announced a crackdown on price gouging a day ahead of an official devaluation of the bolivar, which on Monday began trading at 4.30 to the US dollar for "non-essential" goods -- double the previous rate -- and at 2.60 for basic goods.

By Thursday, he made good on his threat by temporarily shuttering more than 600 retail stores, some of which he accused of hiking prices by 80 percent.

In addition to being shuttered, the shops accused of speculation must also pay a fine.

The bolivar devaluation was the first since 2005, and was designed in part to bolster public finances that have withered amid dwindling oil revenues and a rapidly contracting economy.

Critics said the move would allow Chavez to boost public spending ahead of elections in September but could severely damage the health of the economy.

Date created : 2010-01-18