Mon | May 28, 2018

Kellogg ditches crisis-wracked Venezuela

Published:Thursday | May 17, 2018 | 12:00 AM
A statue of Kellogg's mascot, Tony the Tiger, stands behind the Kellogg's factory's fence, as workers gather outside in Maracay, Venezuela, Tuesday, May 15, 2018.

Kellogg Company closed operations in Venezuela and laid off 300 workers Tuesday at a time of widespread hunger in the crisis-wracked South American nation.

The Battle Creek, Michigan-based company said in a statement that it ceased operations as a result of the "current economic and social deterioration" in Venezuela.

The move drew an angry rebuke from socialist President Nicolas Maduro, who accused the company of trying to sabotage his chances of getting re-elected in Sunday's presidential vote. He said he had ordered the company's plant in the central city of Maracay to be turned over to Kellogg's workers so they can continue to produce cereals.

"Why are they doing it today? Because we are four days away from elections and they think it will spook the people," Maduro said at a campaign rally, adding that he would seek the international arrest of the owners of Kellogg's Venezuelan subsidiary. "Imperialists! Oligarchs! Nobody can scare our people."

Workers arriving Tuesday for the early shift at Kellogg's factory in Maracay were surprised to find a notice taped to an iron gate informing them the company had been forced to shutter the plant. As news of the layoffs spread, Venezuela's labour minister showed up to speak with the workers.

The factory, with a giant figure of Tony the Tiger lording over the entrance, produces 75 per cent of the breakfast cereals consumed by Venezuelans, according to the company's website. A spokeswoman for Kellogg's said its market share was lower than 75 per cent but declined to say by how much.

Omar Rodriguez, who had spent 26 years working at Kellogg's, said he didn't know how he would feed his three children without his job.

"It's going to be a tough blow," Rodriguez said, expressing anger that the company had decided to let go of its workforce in such an impersonal manner. "What am I going to bring home? Nothing."

The company said it looks forward to resuming operations once conditions improve. The company has been producing cereal in Venezuela since 1961 and the market had at one point been its biggest in Latin America after Mexico, although in 2016 it deconsolidated its Venezuela business from the company's overall earnings results.

Kellogg's joins multinationals including Bridgestone, Kimberly-Clark and General Mills that have closed or reduced operations in Venezuela amid hyperinflation, shortages and a recession deeper than the Great Depression of the 1930s.

AP