U.S.-based cereal maker Kellogg Co on Tuesday pulled out of Venezuela due to the country’s deep economic crisis, and an angry President Nicolas Maduro said its units would be taken over and given to workers.
Kellogg confirmed later on Tuesday that its manufacturing plant had been seized by the leftist government, the latest company to jump ship amid Venezuela’s tough business climate.
“I’ve decided to hand the company over to the workers so that they can continue producing for the people,” Maduro said at a campaign rally ahead of Sunday’s presidential election.
“We’ve begun judicial proceedings against the business leaders of Kellogg’s because their exit is unconstitutional,” Maduro added to cheers from red-shirted supporters.
Maduro blames Venezuela’s crisis on an “economic war” he says is waged by Washington, greedy businessmen and coup-mongers.
Kellogg announced its retreat earlier on Tuesday, making it the latest multinational to exit the oil-rich country, which is heaving under hyperinflation and strict price controls.
“The current economic and social deterioration in the country has now prompted the company to discontinue operations,” Kellogg said in a statement, noting that it had already written off the value of its Venezuela holdings.
The company’s local operations had around 400 workers, according to local media.
Kellogg did not specify the difficulties it was facing in Venezuela, but companies have typically been struggling to find raw materials due to product shortages and currency controls that crimp imports. Maduro’s government also stops companies from raising prices to keep up with hyperinflation, sometimes forcing companies to sell below the cost of production.
Other multinational companies that have given up on the OPEC country, abandoning assets or selling them cheap, include Clorox , Kimberly-Clark, General Mills, General Motors and Harvest Natural Resources.
Read more: The Globe and Mail