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Venezuela Governor Seizes Heinz Plant
from Forbes.com
Entered into the database on Monday, September 05th, 2005 @ 20:39:52 MST


 

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A state governor has ordered troops to seize an abandoned tomato processing plant owned by U.S. food company H.J. Heinz Co. in Venezuela, a state official said Monday.

The plant in the eastern state of Monagas still belongs to Heinz but hasn't been used for years, said Angelica Rivero, a spokeswoman for the state governor.

"The governor decided to seize the plant so it can be protected from looters and later be put to use," Rivero said.

Monagas Gov. Jose Gregorio Briceno, a close ally of President Hugo Chavez, told the state-run Bolivarian News Agency the plant changed hands several times under previous governments before Heinz purchased it in 1997, and later ceased operations.

Eduardo Benatui, president for Heinz in Venezuela, could not be reached for comment. Officials at the company's headquarters in Pittsburgh, Pennsylvania didn't immediately return calls seeking comment on Monday, which was the Labor Day holiday in the U.S.

One nearby town, Caicara, suffered due to the actions of the "transnational monopoly," Briceno told the state news agency, known by its Spanish initials ABN.

"At that time I was mayor of that town and I felt impotent, my hands tied, as 30 million kilos (66 million pounds) of tomatoes - almost 1,000 hectares (2,500 acres) - were produced, and the closing of the business led the farm workers to go broke," Briceno told ABN.

Officials were expected to expropriate the plant, a move that would require the National Assembly to declare the property to be of "public interest." It wasn't immediately clear whether soldiers were posted at the plant Monday.

Chavez, a close ally of Cuba's Fidel Castro who says he supports socialism, has said the government may expropriate the property of companies whose factories are idle or partially paralyzed, in order to put them back to work.

Venezuela's constitution says the government will respect private property but says the state may expropriate property if for public use or "social interest," as long as compensation is paid.

So far this year, the government has expropriated the assets of a failed paper company and an industrial valve maker.

The governor's order to seize the tomato plant came as Venezuela's largest food producer, Alimentos Polar, said it was challenging the legality of a military takeover of its storage facilities in the southwestern state of Barinas.

The government claims the silos owned by Alimentos Polar are not being used as required by law. Soldiers seized control of the facilities Wednesday.

The company said last week it was disputing the takeover before the Supreme Court, arguing it violated private property rights.