Butchers beware: Venezuela cracks down on prices

[May 08, 2010]  CARACAS, Venezuela (AP) -- It's getting harder to put meat on the table in Venezuela and the government has been blaming the butchers, arresting dozens on charges of flouting price controls.

Venezuelan President Hugo Chavez said Friday night, however, that he disagrees with the tactic of putting butchers behind bars.

"Don't mess with the butchers," Chavez said in a televised speech. "The butcher isn't the one who's to blame."

He called on officials to instead scrutinize distributors and big players in the beef business, saying if they're violating price controls "what must be done is expropriate everything from them."

At least 40 butchers were detained last week on charges of speculation for allegedly driving up their prices. Some say they were held at a military base and were later strip-searched when turned over to police.

Cold cases are empty -- or display only chicken -- at many of Caracas' butcher shops. Chain supermarkets and crowded municipal markets often offer cuts, but only in small quantities.

Butchers and wholesalers say they have the same problem facing many other industries: government price controls have eliminated profit margins. The recent arrests have prompted some to stop selling beef altogether for fear of ending up behind bars -- adding to the scarcity.

"We've been working all our lives here and we've never been through this before, where they take you away, strip you, take off everything down to your underwear and then put you in a cell," said butcher Omar Cedeno, who was held for two days before being released last week.

He said officials of the consumer protection agency arrived at his Caracas shop with military police, and after citing him for selling beef above the regulated price one official asked him to follow them to "have a chat."

Cedeno was taken away in a truck with soldiers to Fort Tiuna, where he was held along with seven other butchers. They were taken the next day to a courthouse cell, where they were strip-searched, he said.

At least 32 other butchers were also charged last week. If convicted, they could face two to six years in prison.

The government says butchers can charge 17 bolivars -- about $4 -- for a kilogram of beef. Butchers say they have to pay 14 bolivars -- about $3 -- for the meat leaving them no margin to cover the other costs of their business.

Some had been charging 24 to 40 bolivars a kilo, depending on the cut, until last week's raids stopped them from selling any beef at all.

Chavez's socialist government has imposed price controls on many basic foods to combat "savage capitalism" and it blames shortages on growing demand due to rising incomes of the poor.

Cattle ranchers, though, say supplies have suffered because price controls and other government policies have kept prices unchanged since 2008 even as inflation -- the highest in Latin America -- has sent their costs skyrocketing.

Venezuela was self-sufficient in beef in 2003, but it imported 52 percent of what it consumed last year, according to the national cattle ranchers' association.

Despite rising demand, the ranchers are raising fewer cattle. The association said the country had 12 million head this year, down from 13.5 million in 1998.

"The only one that has the magic wand, that has the ability to unblock this situation is the government," said Manuel Cipriano Heredia, the association's president. He urged the government to meet with producers to find a solution to the crisis.

Food Minister Felix Osorio warned on Friday that beef should be sold at the regulated price. He said the government won't accept "blackmail" to raise food prices and said the government will compete with the private sector through state-run markets to lower prices.

Venezuela, which relies largely on its oil industry, has long imported much of its food. And in order to cope with a growing scarcity of various foods from sugar to grains, the government has increased the amount of dollars provided at the official exchange rate for food imports to more than $4 billion a year.

Government officials recently announced they would approve more dollars for beef imports and increase purchases of Brazilian beef to 50,000 head of cattle a month, up from 30,000.

Authorities have also expropriated a slaughterhouse in north-central Aragua state, and stepped up their inspections of butcher shops and slaughterhouses to try to clamp down on prices.

[Associated Press; By FABIOLA SANCHEZ]

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