Venezuela crisis ‘hits’ to Coca-Cola FEMSA – El Universal

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First were the beers and now Coca-Cola. The royal company Fomento Economico Mexicano (FEMSA) and The Coca-Cola Company, representing Coca-Cola of Venezuela System, analyze the state of their production in the South American country and could announce changes next week, after registering intermittent operations that market, said yesterday the communication area of ​​the company.

“Now communicate this situation and if there is any adjustment would be announced on Monday or Tuesday,” he told tHE UNIVERSAL corporate, after issuing, on Friday, a statement warning that its plants in Venezuela are using the remaining inventory sugar existence and that, if this continues, there will be temporary interruptions in the production of beverages with sugar.

the Mexican company Coca-Cola FEMSA, the largest bottler of Coca-Cola in Latin America and assumed operations in Venezuela in 2003, explained that national centers that provide them with refined sugar for industrial use temporarily ceased operations for lack of raw materials and that actions are taken to “face the situation in coordination with suppliers, authorities and our workers.”

according to FEMSA, the possibility of a total stoppage of production in Venezuela discussed at this time, face a difficult situation in the supply of sugar for its beverage portfolio. However, corporate stressed that remains steadfast in maintaining operations in the country.

“The situation is not us, but the sugar industry, this is another line to investigate what is happening with the sugar industry she is the one that provides us and because of that we can not produce, “he said in statements to this newspaper. The company acknowledged that since last week there have been intermittent operations in Venezuela.

There are four bottling plants of Coca-Cola FEMSA in Caracas, Valencia, Maracaibo and Barcelona, ​​along with 33 distribution centers serving 176,000 retailers and 503 retail stores consumer. In 2015, FEMSA sold 8 000 904 million Mexican pesos in Venezuela, which represented 2.8% of their total annual income (using an exchange rate Simadi of 198.70 bolivars per US dollar).

In volume, FEMSA sold in the Venezuelan market 235.6 million unit cases of beverages in 2015, representing 6.8% of the total volume of soft drinks sold by the company. 86.2% of these drinks were soft drinks, bottled water 6.8% and 7% non-carbonated products such as juices.

The sugar shortage complicates the situation of several refresqueras. Last week, the National Association of Soft Drinks (Anber) of Venezuela reported that there was a critical situation of inventories of refined sugar in the country, which impacted production and supply the domestic market. He revealed that was unknown when the situation will normalize.

Venezuelan Farmers complain that the expropriations that applied in 2007 the government of President Hugo Chavez to farm sugarcane discouraged private investment in the sector. Besides this, the nation faces a prolonged drought that forced the current administration of Nicolas Maduro to establish a strict power rationing, by which the industries operate at 50% capacity, but almost 50% is 30%, according with a report delivered to
tHE UNIVERSAL by the Federation of Chambers of Venezuela (FEDECAMARAS), dome of the private sector.

Coca-Cola FEMSA thus becomes the second Mexican company concerned in their operations in Venezuela, after that, in 2008, Chavez expropriates the assets of Cemex cement company.

the announcement of Coca-Cola FEMSA one month is given after Empresas Polar, which manufactures beer and food is one of the oldest and most emblematic of Venezuela companies, warned that it would suspend production for lack malting barley, so scarce that brand beers. Maduro responded by threatening to those plants that stand will be occupied.

With an economy that suffered a decrease of 5.78% of gross domestic product (GDP) in 2015 and continued a decline that began in the first quarter of 2014, Venezuela has frozen about 56% of the industrial park and faces the deepest political, social and economic crisis in its history, with inflation in 2016 would close at 720%, according to various forecasts.

according state Institute of Statistics, the Board of Trade, one of the most important private associations, 58 000 companies closed in 2015 and in 2016 will cease to 40% of companies in various areas. The opposition blames Chavez for lack of planning and waste more than 700 billion dollars received by Venezuela from 2005 to 2014 oil export, which is now almost their only exportable product but with prices accelerated decline in recent years .