Venezuela Takes Control Of Cargill Plant

Official says temporary takeover of Cargill's plant was ordered because the U.S. food giant broke regulations on food items subject to government price controls.

CARACAS, Venezuela (AP) -- President Hugo Chavez's government seized temporary control of a Venezuelan pasta-processing plant owned by U.S. food giant Cargill Inc. on Friday, arguing the company broke regulations on food items subject to price controls.

Venezuelan soldiers accompanied Deputy Food Minister Rafael Coronado and other government officials as they arrived at Cargill's plant in the coastal state of Vargas.

Coronado said "there was a clear transgression of the law," referring to legislation that aims to control inflation by requiring companies to ensure that 70 percent to 95 percent of their products are the types that fall under the government-imposed price controls.

The government claims the controls are needed to stem Latin America's highest inflation, which reached 28.3 percent in April. But businesses argue the controls make it difficult to turn a profit.

Authorities will seize control of Cargill's pasta plant for a 90-day period to review the plant's operations and make sure it's producing 70 percent of its pasta at government-imposed prices, Coronado said.

No one could be reached for comment immediately Friday at Cargill's Caracas offices.

Mark Klein, a spokesman at Cargill headquarters in Minneapolis, Minnesota, declined to immediately comment on the takeover.

Cargill has 12 food-processing plants in Venezuela. It was forced to turn over one of its rice-processing plants last month following the publication of an expropriation decree that Chavez enacted.

Chavez's government has nationalized foreign-owned steel and cement companies, as well as four major oil projects, in the past two years.