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Venezuela seizes Kellogg unit after company halts operations

16 May 2018

The Kellogg Company says it's closing operations in Venezuela at a time of widespread hunger in the crisis-wracked South American nation.

“The (Lima Group) is making a final call to the Venezuelan government to suspend the general elections planned for May 20, as they have been called by an illegitimate authority, ” Mexican Foreign Minister Luis Videgaray said, reading the statement.

Workers arriving Tuesday for the early shift at Kellogg's factory in the central city of Maracay were surprised to find a notice taped to an iron gate informing them that the company had been forced to shutter its operations in the country.

"We've begun judicial proceedings against the business leaders of Kellogg's because their exit is unconstitutional", Maduro added to cheers from red-shirted supporters. "The current economic and social deterioration in the country has now prompted the company to discontinue operations", Kellogg said in a statement.

Kellogg joins a string of other multinationals that have ceased or curtailed operations in the oil-rich country amid hyperinflation, shortages and state-imposed price controls.

The company's local operations had around 400 workers, according to local media.

United States companies Kimberly-Clark, General Motors and Clorox are among several multinationals to shut down their Venezuela operations in recent years.

Socialist Maduro has taken over the factories of some companies that have left the country. In 2014, authorities took over two plants belonging to USA cleaning products maker Clorox after its departure. In family breakfast cereals, Kellogg's Corn Flakes also held the leading position in 2017 with a 46% value share.

"This reminds me of the Clorox case", opposition lawmaker Jose Guerra tweeted about Kellogg. "It was paralyzed due to lack of raw materials, the government took it and today it is paralyzed".

Kellogg said product distribution in Venezuela has been suspended and the license agreement for the use and commercialization of its brands and characters in Venezuela has been terminated.

Venezuela seizes Kellogg unit after company halts operations