Venezuela cracks down on electronics chain accused of price-gouging

Socialist government sends troops into electronics stores, arrests some managers and forces company to start selling products at lower prices

PUBLISHED : Monday, 11 November, 2013, 5:53am
UPDATED : Monday, 11 November, 2013, 5:53am

Venezuelan President Nicolas Maduro's socialist government "occupied" a chain of electronics stores in a high-profile crackdown on what it views as price-gouging hobbling the country's economy.

Authorities arrested various managers of the five-store, 500-employee Daka chain, sent soldiers into the shops and forced the company to start selling products at cheaper prices.

That brought crowds of bargain-hunters to Daka outlets on Saturday and also sparked looting at one store in the central city of Valencia.

"Inflation's killing us. I'm not sure if this was the right way, but something had to be done. I think it's right to make people sell things at fair prices," said Carlos Rangel, 37, among about 500 people queuing outside a Daka store in Caracas.

Maduro, who accuses rich businessmen and right-wing political foes backed by Washington of waging an economic "war" against him, said the occupation of Daka was simply the "tip of the iceberg" in a nationwide drive against speculators.

In a speech to the nation on Saturday evening, he condemned the looting reported in Valencia, but said it was an isolated incident and the real criminals were unscrupulous businessmen exploiting Venezuelans with unjustified price hikes.

"The ones who have looted Venezuela are you, bourgeois parasites," Maduro said, accusing Daka of raising some prices of products beyond 1,000 per cent of cost. He showed particular astonishment that a washing-machine was on sale at the store for 54,000 bolivars (HK$67,000).

"We're going to comb the whole nation in the next few days. This robbery of the people has to stop," Maduro said. "You've not seen anything. This is the just the little tip of the iceberg."

At Daka's flagship store in Caracas, soldiers organised hundreds of people into queues, making lists before calling them in one by one. Rangel had waited overnight, with various relatives, and was hoping to find a cheap TV.

Maduro's measure, after weeks of warnings of a pre-Christmas push against private businesses to keep prices down, recalled the sweeping and often theatrical takeovers during the 14-year government of his predecessor, Hugo Chavez.

But Maduro, who took over in April after Chavez's death from cancer, has stopped short of the outright nationalisations that characterised his mentor's rule.

Economic officials fanned out across Venezuela on Saturday, entering other shops to check prices in a pre-Christmas offensive by the government.

Critics say Venezuela's runaway inflation - the annual rate is now 54 per cent, the highest since Chavez came to power in 1999 - is due to economic mismanagement and the failure of socialist policies rather than some unscrupulous retailers.

Opponents say excessive government controls and persecution of the private sector are to blame for shortages of basic goods ranging from flour to toilet paper, and for price distortions and corruption caused by a black-market currency rate nearly 10 times higher than the official price.