Pepsi plant shuts down in Venezuela as desperation grows over product shortages

Soft drinks could become the next product that disappears from shelves in hapless Venezuela as currency controls and economic mismanagement continue to generate shortages in the struggling South American nation.

A Pepsi factory in the city of Valencia said it shut down operations this week because it’s not able to purchase bottle caps or parts for cans. Two other Pepsi bottling plants are also reportedly at risk of shuttering for similar reasons.

Dozens of Pepsi workers, afraid of losing their jobs, picketed outside the factory on Wednesday. They said that Polar, a large bottling company that supplies Pepsi with materials, stopped sending bottle caps and supplies for cans over a week ago.

“Our suppliers are not getting dollars to buy raw materials,” said Argenis Peraza one of the leaders of the protest outside the Valencia factory. “If they don’t have aluminum sheets, they can’t make [bottle caps] and our assembly lines get shut down.”

Currency controls in Venezuela force companies to buy U.S. dollars from the government when they need to import supplies. But as oil revenues fall in the petro-dependent nation, the government has struggled to allocate enough greenbacks to dozens of companies, which has stalled imports and grinded production lines in factories across the country.

Chicken, beef, powdered milk, toilet paper and shampoo have been tough to find in Venezuela for months. Long lines quickly form outside supermarkets that manage to purchase a few crates of these goods.

As Pepsi, Polar and other companies struggle to maintain production, supermarkets are finding that their clients are becoming increasingly angry and frustrated over the shortages and growing lines.

Over the past week local media has reported several cases of looting across Venezuela. In the south-eastern city of San Felix, 60 people were arrested and one person was fatally shot as a large mob looted a local supermarket and clashed with police.

Looting has also affected supermarkets in San Cristobal and Valencia. In Sinamaica, a town with a large indigenous population near the border with Colombia, locals assaulted two food trucks and torched the mayor’s office. Protesters claimed that municipal authorities and the National Guard were allowing merchants to divert food shipments into neighboring Colombia, where products sell for up to ten times as much.

The government claims that recent incidents of looting are part of a “right-wing conspiracy,” aimed at toppling socialist president Nicolas Maduro. But officials have failed to provide any evidence that proves looters are plotting a coup, or that the unrest is caused by anything other than product shortages and a crumbling economy.

The opposition MUD coalition said in a statement this week that the looting is a result of the “economic destruction” brought about by Venezuela’s socialist government.

Manuel Rueda is a correspondent for Fusion, covering Mexico and South America. He travels from donkey festivals, to salsa clubs to steamy places with cartel activity.