Tuesday, May 24, 2016

Coca-Cola will suspend production in Venezuela due to lack of sugar

Coca-Cola paralyzes production in Venezuela.  Cans of Coca-Cola. BLOOMBERG | REUTERS-QUALITY 
The measure was announced after the state company that processes sugar cease activity. The bottler of Atlanta-based company said that production will be affected in the "coming days" and does not clarify at what point can resume normal production of Coca-Cola Classic in Venezuela. The situation in the country does nothing but get worse and economic hardship also affects imports of commodities for the production of beverages and food. Last week, the Venezuelan state company in charge of processing the sugar temporarily cut production. "We are advancing specific actions that allow us to face this situation with suppliers, authorities and our workers," said the firm in a statement over the weekend.

Coca-Cola Femsa which operates four bottling plants and employs about 7,300 workers in Venezuela, said that factories are consuming the remaining sugar inventory. "If not recover this inventory as soon as possible, temporary interruptions in the production of sugar beverage portfolio will be generated." In late April Empresas Polar had to stop production of beer because the government does not give the dollars needed to purchase raw materials.

Coca-Cola Femsa is the largest bottling company in the world, with plants also operate in countries like Brazil, Mexico, Colombia and Argentina. The partner of the US corporation explains that "90% of production" of its popular soft drink needs sugar, so it has no choice but to temporarily suspend its operations for that product. Also they make clear to the company that they will not leave the country. Now Coca-Cola Femsa are looking for other alternatives to gain refined sugar it needs for refreshments. The temporary cessation does not affect sugar - free drinks, where operations continue normally and its headquarters will remain open. Multinationals also face problems for the continued depreciation of the Venezuelan currency, as reflected in the results of PepsiCo, General Motors and Ford Motor.

In the Chavista was the popular drink bottler has faced numerous trade disputes. In May 2013 was the last major. Valencia plant in the center of the country, spent at least a week without producing bottled water and juice-based drinks and tea, part of the products they offer. All past conflicts have originated in the differences between the aspirations of the accused and supply of Coca-Cola. But the lack of raw material and deepening scarcity inaugurate an era whose consequences are still to be seen.


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