Published: Thu, May 17, 2018
People | By Neil Grant

Kellogg Shuts Down Cereal Plant in Venezuela

Kellogg Shuts Down Cereal Plant in Venezuela

Kellogg joins several multinationals exiting the country due to a crippling economic crisis.

"The current economic and social deterioration in the country has now prompted the company to discontinue operations", the company said.

The socialist regime nationalized the company's production plant in the city of Maracay in response to the move.

President Nicolas Maduro, who is standing for re-election, told a rally that he would hand control of the factory over to the workers.

Kellogg's is the most recent company to pull out of Venezuela, following the likes of Colgate-Palmolive, General Mills and Kimberly-Clark.

Kellogg is the latest multinational to close or scale back operations in Venezuela, citing strict currency controls, a lack of raw materials and soaring inflation. Because Venezuela is having a presidential election on May 20, he explained, "tonight, we thought we'd check in on what's been happening there, to try and understand how Venezuela got into this mess and how, despite making it even worse, their current president, Nicolas Maduro.is nearly certainly going to win, despite having the support of only about a fifth of the population". Zeus Exchange, which Druzhkov created alongside a Kremlin-connected industrialist, said in a statement that it has never had any business ties with the Venezuelan government and that Druzhkov resigned after abusing his authority. Mr Maduro blames Venezuela's crisis on an "economic war" that he says is being waged by Washington, greedy businessmen and coup-mongers.

According to Euromonitor, Alimentos Kellogg dominated the breakfast cereals sector in Venezuela past year with a 50% retail value share.

In 2014, the government took over two plants belonging to cleaning products producer Clorox.

Kellogg warned against the unauthorized production and sale of its products, threatening legal action if necessary.

The closure is not expected to significantly worsen food shortages in Venezuela, but it was a further blow to morale for many Venezuelans as Kellogg's is the most popular and available cereal in the country. According to its website, the factory produces 75% of the breakfast cereals consumed by Venezuelans.

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