Venezuela Food and Drink Report Q2 2008

Publication Date	April 2008
Publisher	Business Monitor
Product Type	Report
Pages	65
ISBN Number	1749-3064
Product Code	BMI01365

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£425.00
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Summary

The idiosyncratic food policies of Venezuela's president Hugo Chvez show no signs of abating; indeed developments in 2008 suggest that the government may actually be stepping up its policy of food nationalisation. These policies have moved from threatening private firms' profits to threatening their very existence, with Chavz making worrying statements about the possible appropriation of assets. With ongoing food shortages one of the main threats to Chvez's popularity, Venezuela's president is unlikely to be satisfied until a large percentage of food production is in the hands of the state.

In the oil driven economy, government and consumer spending is rising on the back of bumper oil receipts. However, a disparity between supply and demand has pushed inflation up to 22.5% in 2007 - the highest level in Latin America. This is a considerable problem for the low-earning majority, who have as yet not seen their incomes rise in line with the country's rising GDP. To address this threat to his popularity Chvez created Mercal, a new nationalised food retailer, imposed a web of price controls and imposed export limits on many foods. Government-set prices have hardly risen since they were introduced in 2003, leading many producers, who are unable to operate at a profit, to close down plants and reduce production levels. This drop in production has led to shortages of many basic food products including milk, eggs, meat, chicken and wheat flour.

Empty shelves are a big threat to the government's popularity and in 2008 Venezuela's president has made several remarks that suggest he is now considering drastic moves to shore up supplies. In February Chvez threatened to seize the assets of the country's milk producers, singling out Italian-based dairy giant Parmalat and Swiss-based Nestl. Chvez suggested that these firms may pressurise or blackmail Venezuelan farmers to obtain their milk for export and claimed that state-owned dairy firms were having difficulty sourcing milk because the supplies had already been illegitimately secured by international companies. This was followed up by a warning to the country's largest food producer Empresas Polar.

Chvez claimed that the company was hoarding food and not abiding by price controls and called it a 'clear example' of a business that could be taken over. The firm responded to this attack by revealing that government price controls do not apply to most of its products, and those that do have fixed prices are sold wholesale to supermarkets, leaving the markets, not the company, responsible for any overcharging.

However, with Chvez anxious to take his country further down the road towards socialism - and state owned food production part of that ideal - logical arguments may not be enough to counter the threat of nationalisation.

Content

Executive Summary
Business Environment
Regional Food & Drink Business Environment Ratings
Venezuela's Food & Drink Business Environment Rating
SWOT Analysis
Mass Grocery Retail
Venezuela Mass Grocery Retail Industry SWOT
Food and Drink
Venezuela Food And Drink Industry SWOT
Macroeconomic Outlook
Retail
Regional Overview: Environmental Retailing in Latin America
Industry Forecast Scenario
Industry Developments
Market Overview
Food And Drink
Regional Overview: Confectionery in Latin America
Industry Forecast Scenario
Food
Drink
Industry Developments
Food
Agriculture
Drink
Market Overview
Food
Agriculture
Drink
Tobacco
Industry Forecast Scenario
Industry Developments
Market Overview
Competitive Landscape
Key Players
Mass Grocery Retail
Food and Drink
Latin America Regional Company Case Studies
Food: Grupo Bimbo in Latin America
Food: Bunge Ltd in Latin America
Mass Grocery Retail: Falabella in Latin America
Company Analysis
Food
Alimentos Heinz CA
Cargill de Venezuela
Empresas Polar
Drink
Coca-Cola FEMSA
Pernod Ricard Venezuela
Mass Grocery Retail
Mercal CA
Makro Venezuela
Food & Drink Ratings Introduction: Revised Methodology
Ratings Overview
Ratings System
Indicators
Limits of Potential Returns
Risks to Realisation of Potential Returns
Weighting
Weighting
BMI Forecast Modelling
How We Generate Our Industry Forecasts
Retail Industry
Sources
List of Tables
- Table: Latin America Food & Drink Business Environment Ratings
- Table: Global Food & Drink Business Environment Rankings
- Table: Economic Activity
- Table: Possible Environmental Measures In The Food And Drink Supply Chain
- Table: The Environmental Aspects Of Retailing, Possible Areas Of Activity
- Table: Latin America, Ecological Footprint By Country
- Table: Latin America, Area Under Organic Management By Country
- Table: Venezuela Mass Grocery Retail - Value Sales by Format - Historical Data & Forecasts
- Table: Sales Breakdown by Retail Format Type - 2006 & 2016
- Table: Structure of Venezuela's Mass Grocery Retail Market by Estimated Numbers of Outlets
- Table: Structure of Venezuela's Mass Grocery Retail Market - Sales Value by Format (US$bn)
- Table: Average Annual Value Sales by Format - 2006
- Table: Latin America - Estimated Confectionery Sales (US$ mn)
- Table: Latin American Confectionery Producers Ranked Among the World's 100, 2006
- Table: Venezuela Food Consumption Indicators - Historical Data & Forecasts
- Table: Value/Volume Sales of Selected Food Sub-Sectors - Historical Data & Forecasts
- Table: Food, Drink & Tobacco Trade Indicators (US$mn)
- Table: Venezuela Beverage Sectors, Value/Volume Sales - Historical Data & Forecasts
- Table: Venezuela Dairy Industry Data ('000 tonnes, unless stated)
- Table: Venezuela Organic Agricultural Data, 2005
- Table: Cigarette Value/Volume Sales - Historical Data & Forecasts
- Table: Key Players in Venezuela's Mass Grocery Retail Sector
- Table: Key Players in Venezuela's Food & Drink Sector
- Table: Grupo Bimbo - Net Sales 2005 vs. 2006 (US$ mn)
- Table: Grupo Bimbo - Divisions
- Table: Grupo Bimbo - Plants & Brands in Latin America
- Table: Bunge Ltd, Net Sales To External Customers By Operating Segment, 2004-2006 (US$mn)
- Table: Bunge Ltd, Latin American Operations
- Table: SACI Falabella - Company Structure
- Table: SACI Falabella - Financial Indicators (US$ mn)

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Product features / use

Scope	Expert Insight/Opinion
Level	General Industry Strategies
Data	Detailed Market Forecasts
Profiles	Profiles of Key Companies
Features	Contains SWOT Analysis
Extra Info	Consumer Trends Highlighted