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Sugar shortage cuts Coca-Cola production in Venezuela | Sugar shortage cuts Coca-Cola production in Venezuela |
(about 1 hour later) | |
A sugar shortage has forced Coca-Cola to stop producing soft drinks in Venezuela amid an escalating food and energy shortage. | A sugar shortage has forced Coca-Cola to stop producing soft drinks in Venezuela amid an escalating food and energy shortage. |
Coke said that suppliers in Venezuela will "temporarily cease operations due to a lack of raw materials". | Coke said that suppliers in Venezuela will "temporarily cease operations due to a lack of raw materials". |
The announcement comes after the country's biggest brewer, Empresas Polar, closed plants due to a barley shortage. | The announcement comes after the country's biggest brewer, Empresas Polar, closed plants due to a barley shortage. |
Venezuela's economy has contracted sharply as oil prices plunge. | Venezuela's economy has contracted sharply as oil prices plunge. |
A Coca-Cola spokesperson said the company would continue producing sugarless drinks such as Coca-Cola Light (Diet Coke). | A Coca-Cola spokesperson said the company would continue producing sugarless drinks such as Coca-Cola Light (Diet Coke). |
"We are engaging with suppliers, government authorities and our associates to take the necessary actions for a prompt solution," she said. | "We are engaging with suppliers, government authorities and our associates to take the necessary actions for a prompt solution," she said. |
Sugarcane production has been falling due to price controls and rising production costs, as well as problems in obtaining fertiliser. | Sugarcane production has been falling due to price controls and rising production costs, as well as problems in obtaining fertiliser. |
As a result, many smaller farmers have turned to other crops that are not price controlled and thus generate higher income. | As a result, many smaller farmers have turned to other crops that are not price controlled and thus generate higher income. |
Venezuela is expected to produce 430,000 tonnes of sugarcane in 2016/17, down from 450,000 tonnes for the previous 12 months, and import 850,000 tonnes of raw and refined sugar, according to USDA figures. | Venezuela is expected to produce 430,000 tonnes of sugarcane in 2016/17, down from 450,000 tonnes for the previous 12 months, and import 850,000 tonnes of raw and refined sugar, according to USDA figures. |
The economic problems have forced many consumers to queue for hours to buy basic foodstuffs. | The economic problems have forced many consumers to queue for hours to buy basic foodstuffs. |
Venezuela's economy is expected to shrink by 8% in 2016 after it contracted by 5.8% last year. | Venezuela's economy is expected to shrink by 8% in 2016 after it contracted by 5.8% last year. |
Its reliance on oil to generate foreign currency and investment has made it a victim of regular recessions. | Its reliance on oil to generate foreign currency and investment has made it a victim of regular recessions. |
President Nicolas Maduro has instituted a state of emergency in an effort to combat the economic crisis. Critics argue it is an attempt to strengthen his grip on power. | |
Meanwhile, tyre maker Bridgestone said on Monday it was selling its Venezuelan business after six decades in the country. | Meanwhile, tyre maker Bridgestone said on Monday it was selling its Venezuelan business after six decades in the country. |
The company's Venezuelan assets will be sold to Grupo Corimon. | The company's Venezuelan assets will be sold to Grupo Corimon. |
Other multinational firms such as Ford, Procter & Gamble and Halliburton have either slowed or abandoned their investments in Venezuela. | Other multinational firms such as Ford, Procter & Gamble and Halliburton have either slowed or abandoned their investments in Venezuela. |