Latest campaign by Chavez ‘polarizes’ Venezuelans

* President focuses on top food, drinks firm

* Issues threats to nationalize Empresas Polar

By Esteban Israel

CARACAS, June 4 (BestGrowthStock) – A passion for locally brewed
Polar beer was one of the few things that bound Venezuelans
together in the politically fractious country — until now.

A campaign by President Hugo Chavez against Empresas Polar,
the Latin American nation’s largest food and drinks maker, is
politicizing one of its favorite drinks.

Chavez accuses the conglomerate of billionaire Lorenzo
Mendoza of being part of a group of private companies he says
are trying to destabilize his socialist government by, among
other things, keeping inflation artificially high.

“If you think I won’t dare to nationalize Empresas Polar,
you are wrong,” Chavez said in a televised speech this week.
“Get down from your cloud, Mendoza. Here in Venezuela there are
no untouchables, no sacred cows.”

Chavez’s administration has nationalized a wide range of
companies in the OPEC member nation. He has lashed out at Polar
before, but now his verbal attacks have intensified.

Some analysts see a political motive behind the rhetoric
against Polar, the country’s biggest private employer.

Chavez faces a crucial test of his support at legislative
elections in September, and some experts say he is looking to
shift the blame for the woes of an economy that contracted 5.8
percent in the first quarter of this year. [ID:nN25157365]

Previous appropriations and strict currency controls have
scared away investors and fueled capital flight.

Chavez has argued that the only way to control prices is to
increase the role of state-run companies in the economy.

“If inflation continues to rise, I think Polar might become
a scapegoat,” said New York-based analyst Boris Segura of RBS.
“I think it would be a terrible mistake.”

In addition to popular beer brands, Polar makes dozens of
products including maize meal used for Venezuela’s arepa
flatbreads. It also distributes Pepsi-Cola (PEP.N: ).

Political scientist John Magdaleno said Chavez was running
a risk because Polar was part of Venezuelans’ mental and social

“The potential impact of this is much more serious and more
profound than he might believe,” he said.

Chavez’s supporters have applauded his nationalizations as
a way to redistribute wealth in a nation where extreme social
disparities remain. Opponents say they are proof he wants to
transform the country into a communist regime like Cuba.

“What we are seeing against Polar and other companies is
simply a process of the destruction of capital,” said Carlos
Larrazabal, head of the largest trade union, Conindustria.

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(Editing by Daniel Wallis and Xavier Briand)

Latest campaign by Chavez ‘polarizes’ Venezuelans