In recent months, basic goods such as sugar, pasteurised whole milk and meat have been in short supply in supermarkets.

Producers complained that price controls had left them unable to make their businesses profitable forcing the government to end value added tax on basic goods and announce subsidies for producers.

Warehouses raided

Venezuela's consumer protection agency and National Guard have raided warehouses and confiscated tons of food they say vendors were unwilling to sell at the official price. The seized food was then sold at low-cost markets and makeshift distribution centres.

"This is a veiled threat against any company, any business owner, any investor, any citizen"

Jose Luis Betancourt, president of Venezuela's main business chamber
Chavez said his decree permitting the takeover of food stores and warehouses would take effect as soon as it is published this week.

"The large storage installations, distribution chains, if we have to take them over and nationalise them, wait a few hours for the law to be approved," he said.

Jose Luis Betancourt, president of Venezuela's main business chamber, said Chavez's threat carries grave implications for the private sector.

"This is a veiled threat against any company, any business owner, any investor, any citizen," Betancourt told Globovision TV, saying such a move would effect ordinary Venezuelans as well as the supermarkets.

Chavez was re-elected in December and the National Assembly has given him the power to rule by by decree for 18 months.

The president pledged to use this power to nationalise "strategic" areas of the economy and he has moved quickly to buy out private interests in leading electricity and telephone companies.