Venezuela food crisis forces Coca-Cola shutdown

Firm stops production over sugar shortage as country faces one of worst economic crises in recent history.

Venezuelan soldiers stand guard in a street outside a supermarket while people queue to try to buy basic food items in Caracas
Many people cannot afford to wait for hours in queues at markets [Reuters]

Coca-Cola, the US-based multinational corporation, has halted production of sweetened beverages in Venezuela due to a severe sugar shortage – the latest sign of what some are calling the worst food, power and economic crises to hit the country in recent history.

The company explained in a statement that 90 percent of its beverage production require sugar, but added that it would not close its headquarters.

“Ninety percent of the production requires sugar. We are not going to shut our central office right now. We are not leaving Venezuela,” it said.

The South American nation is facing a deep financial crisis after the collapse of global oil prices, on which its economy relies.

David Smilde, a senior fellow at WOLA, a human rights organisation in the Americas, said Coca-Cola’s shutdown came as Empresas Polar, which is Venezuela’s largest brewery, had to close plants due to a shortage of barley.

Many other staple foods cannot be found in markets across the country. There is also an acute shortage in medicines.

“If you go to the supermarket, there is no milk, rice or pasta,” Smilde said, although he added that, oddly enough, you can find products that an average person could not afford.

“You can buy yogurt, cookies, and frozen chicken fingers – but these are all out of range for the basic person’s budget. A lot of normal diet is missing.”

READ MORE: Is Venezuela on the brink of collapse?

To make matters worse, the price of food has skyrocketed by at least five times, as more ordinary people use extra time on their hands to wait in the long queues at markets to buy rare foods and resell them at a profit.

‘Famine trait’

Marianella Herrera, a researcher and expert on Venezuela’s food and nutritional standards, told Al Jazeera that most people cannot afford to take time off of work to wait for hours in queues at grocery stores.

She also said Venezuela was facing an issue associated with a famine.

“There is only one element that is in alignment with famine: The low production of national goods for the agrifood market. This is a critical aspect to ensure that food security will be achieved without any other resources.”

“Venezuela has relied over the past five years on imported goods and, with the low oil prices, there has been a low availability of foreign currency needed for this pattern of buying foreign foods to continue.”

Some analysts say the country is on the brink of a serious economic collapse and that may push it into a state of political turmoil.

On Friday, the country’s Supreme Court upheld President Nicolas Maduro’s state of emergency decree that was issued last week and gives him extra powers to deal with the economic crisis.

The decree gives him the right to impose tougher security measures, which some fear could lead to rights abuses in the face of increasing protests.

Smilde said that Venezuela has had a long history of protests, but in the past 10 days the country has seen a new trend of demonstrations particularly over food shortages.

Alejandro Velasco, an expert on Venezuelan history at New York University, told Al Jazeera that the government has previously used the state of emergency decree to boost the military presence to quell dissent and demonstrations.

“We are seeing far more military presence in the streets accordingly. The government is certainly trying to get ahead of any disorder that may quickly spiral out of control.”

“But the main reason for why the recent protests are not as large as you expect is because most people do not have the time due to all their efforts searching for food or water.”

READ MORE: Protests intensify against Venezuela’s Maduro

Herrera said that many NGOs are issuing petitions to government policymakers to take the appropriate action to alleviate the crisis.

‘Oil is not the answer’

But Velasco and Smilde offered little hope of any positive change since the government and the opposition, which controls Venezuela’s parliament, have failed to provide any real solutions to the economic crisis, and have instead focused their efforts on pushing and hoping for a rise in oil prices.

“They are trying to persuade OPEC to take steps that would boost oil prices and for Saudi Arabia to cut production,” Velasco said.

“But we need to find a way to not be dependent on oil. And yet no one from the government or opposition has mentioned anything remotely about moving away from dependency on oil.

“Oil is not the answer, it is the reason for Venezuela’s crisis.”

Velasco said that cutting back on public services and resources and defunding social programmes is not helping the country, but causing more people to suffer.

“The last time it happened we saw the downfall of previous regime. If history proves true, we are going to see the collapse of this government.”

Source: Al Jazeera