THE AMERICAS

Coca-Cola set to suspend bottling in Venezuela as sugar supplies dwindle

State sugar company stops imports as foreign currency reserves dry up and crisis deepens

Coca-Cola production could soon end in Venezuela.
Coca-Cola production could soon end in Venezuela.Bloomberg

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The Coca-Cola Company said that production at its Venezuelan plant will be affected “in the coming days” because of sugar shortages, and that it does not know when bottling of the fizzy drink will resume.

The situation in Venezuela continues to worsen, hitting imports of basic goods required for food and drink processing. Last week, Venezuela’s state-owned sugar processing company began cutting output, a move that affected Coca-Cola.

Coca Cola Femsa, the world’s largest bottler, has four plants employing 7,300 people in Venezuela, and says that its factories are now using their last sugar supplies

“We are taking specific measures to deal with suppliers, the authorities and our workers,” the Atlanta-based company said in a statement over the weekend.

The company’s regional partner, Coca-Cola Femsa, which is the world’s largest bottler, has four plants employing 7,300 people in Venezuela, and says that its factories are now using up their last sugar reserves.

“Unless more arrives soon, there will be temporary interruptions in the production of our portfolio of drinks made with sugar,” it said in a statement. At the end of April, Empresas Polar, one of the country’s largest private groups, interrupted production of beer because the government wouldn’t give it the dollars required to buy raw materials.

Mexican company Femsa owns 47.9% of the world's second largest bottler of Coca-Cola, Coca-Cola Femsa, which operates in nine Latin American countries and distributes about 10% of the worldwide output of Coca-Cola products. The company insists it has no intention of leaving Venezuela.

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But it also faces serious problems due to the continued depreciation of the bolívar, Venezuela’s currency, along with other major US players with a big presence in the country, such as PepsiCo, General Motors, and Ford.

Coca-Cola Femsa’s bottling plants in Venezuela have been hit by labor disputes over the last 15 years. In May 2013, its factory in the central city of Valencia was shut down for a week. Now, the sugar shortages and production decline may be ushering in a new era of conflict of unpredictable outcomes.

English version by Nick Lyne.

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