Seized Heinz Processing Plant in Venezuela Illustrates Hazards of Global Operations

The Pittsburgh Post-Gazette ^ | September 17, 2005 | Teresa F. Lindeman

[mcg2000]

While Venezuelan President Hugo Chavez was making a splash in New York, calling for the United Nations to be moved and blasting world leaders for avoiding action on real problems, representatives of the H.J. Heinz Co. on Thursday were meeting with officials in Venezuela to discuss a tomato-processing plant seized by authorities there earlier this month.

[stocksthatgoup]

Equal value of Venzeula's assets should be siezed in the USA.

[satchmodog9]

They were not expecting this?

[The SunDrop Kid]

Eminent Domain strikes again!

[SAJ]

They've learned it in Venezuela, too, with the expropriation of Creole Oil in the early 1970s. Creole was a subsidiary of Standard Oil of New Jersey, later Exxon.

[betsyross1776]

JUst keep letting this monster go . He is walkin right across the US interests in South America. Keep giving this mouse a cookie and sooner or later he will want th whole jar plus a gallon of milk to drink it with.

[betsyross1776]

JUst keep letting this monster go . He is walkin right across the US interests in South America. Keep giving this mouse a cookie and sooner or later he will want th whole jar plus a gallon of milk to drink it with.

[mcg2000]

Snippets ... venezuelanalysis.com

"According to Máspero there are currently eight businesses in Venezuela that workers have occupied, to which belongs the Heinz plant in Monagas. Others include Probamasa, a corn processing plant owned by the food and beverage company Polar; a plant belonging to the dairy company Parmalat, in Machiques; Parmalat in Barquisimeto; Sideroca Proacero in Cabimas; the valve factory Inveval in Los Teques; the paper plant Invepal in Morón; and the meat-packing company Fribarsa in Barinas. Only two of these, Inveval and Invepal, have completed the full legal procedure for turning the plants over to the workers.

Máspero also said that the UNT would ask Venezuela’s National Assembly to declare these businesses of “public utility,” a necessary step prior to the government’s expropriation of privately owned businesses."

[itsahoot]

"We Will Take From You For The Good Of The Country"

-------------------------------
Hillary Rodham & Hugo Chavez

Add the Supreme Court to that list as well. RE: Kelo

[economist-student]

Yes, that's true. Venezuelans, compared to other latinamerican countries, are large consumers of ketchup. Apparently, some chavistas involved in the ketchup business wanted to get rid of Heinz ketchup so they might have pressed for this seizing. Some of Heinz's competitors in Venezuela:
Del Monte:

Pampero: (makers of Pampero Rum, supported Chavez's campaign back in '98)

Tiquire Flores brand, made by Empresas Polar (Venezuela's largest "private" company):

BTW, Heinz had to build this plant in order to supply the local market, as it is illegal to import more than $200 million in agricultural products from the US.

One the main reasons for the closure of this ketchup plant was that agriculture in Venezuela is very bad and farmer's productivity extremely low (the result of years of collectivization and protectionism) The farmers who supplied Heinz with tomatoes did not fulfill their supply agreement stating that tomatoes had to be sold at an agreed price and instead relinquish the contract and sold their tomatoes fresh to get a better price. Apparently they do not understand the words "agreed price" or "contract"

I remember two years ago when I was I Venezuela that I saw US-made Heinz ketchup being sold. It was of better taste, and anyone who could afford it bought it instead of the local made. This might have pushed the decision...

[economist-student]

*relinquished

Laptop keyboards are very frustrating... :)

[Lessismore]

BTW, Heinz had to build this plant in order to supply the local market, as it is illegal to import more than $200 million in agricultural products from the US.

You must mean the main plant employing 700, and not the one that was seized?

The plant that was seized was bought by Heinz in 1996 and apparently it was never operated. Possibly Heinz was trying to reduce competition?

[marty60]

Yep, they should start planting the explosives to destroy the plants when HUGOOOOO kicks their butts out.

[Eva]

US oil companies are already troubled by their relationship with Chavez. Venezuela nationalized all oil interests once before and there is fear that he is about to do the same.

[Taffini]

too funny, thanks

[economist-student]

Yes, thanks for pointing that out.

"Heinz claimed that they are open to talks and want to meet with Venezuelan authorities. They clarified, however, that market conditions forced them to take "a break" at the plant, and they had plans to put it for sale.

In the press release, Heinz claimed "one of the reasons for the suspension of activities in the plant was the fact that local farmers failed to meet agreements with Heinz to supply tomatoes (...) this resulted in a lack of raw material essential for the operation of the facilities." Heinz requested explanation on plant seizure