US-based breakfast cereal manufacturer Kellogg is reportedly pulling out of Venezuela as the country’s economic crisis intensifies ahead of this weekend’s presidential election.
Kellogg cited strict currency controls amid a plunge in the bolivar, a lack of raw materials and soaring inflation for its decision to exit the country, the BBC reported. A drop in oil revenue has starved the oil exporter of cash and reduced demand for the local currency.
Workers were apparently prevented from entering the plant in the central city of Maracay on Tuesday (15 May).
Venezuelan President Nicolas Maduro, who is standing for re-election in Sunday’s polls, told a rally that he would hand control of the factory over to the workers to keep the plant operational, adding that he thought Kellogg’s decision was ”unconstitutional”.
”In December of 2016, Kellogg de-consolidated its Venezuela business from the company’s results,” television news channel CNBC quoted a company statement as saying. ”The current economic and social deterioration in the country has now prompted the company to discontinue operations.”
However, Kellogg has warned against sales of its brands ”without the expressed authorisation of the Kellogg Company”, but said it hoped to return to Venezuela in the future.
”We’ve begun judicial proceedings against the business leaders of Kellogg’s because their exit is unconstitutional,” Maduro told supporters in the central state of Carabobo. “I’ve taken the decision to deliver the company to the workers in order that they can continue producing for the people.”