Venezuela allows price control exemption of some products

CCTV News

One of the most visible consequences of Venezuela's steep recession has been a lack of food in the shops. One of the most visible consequences of Venezuela’s steep recession has been a lack of food in the shops.

One of the most visible consequences of Venezuela’s steep recession has been a lack of food in the shops.

The government has long attempted to make essential goods affordable to the poorest by forcing retailers to sell many products at regulated prices. But that has helped fuel a black market. Now the authorities appear to be trying a new strategy.

CCTV America’s Stephen Gibbs reports the story.

Venezuela allows price control exemption of some products

Venezuela allows price control exemption of some products

One of the most visible consequences of Venezuela’s steep recession has been a lack of food in the shops. The government has long attempted to make essential goods affordable to the poorest by forcing retailers to sell many products at regulated prices. But that has helped fuel a black market. Now the authorities appear to be trying a new strategy. CCTV America’s Stephen Gibbs reports the story.

For the past two years, a common site among groceries in Venezuela has been the long lines outside shops selling price-controlled goods. And inside, empty shelves. Products, when available, are bought up within hours, and often then resold on the black market.

But in the last few weeks something has changed.

Go into a private supermarket in Caracas, and in other major cities, and shoppers will find.

A return of many of the goods that have not been available for months. Things like cereal, detergent, and milk

There is, however, a catch: the pricetag.

Most of these products cost approximately the same – or more – as they would in U.S. stores.

And Venezuelan salaries have been decimated by inflation.

So what was behind this? The government, it seems, has quietly removed or decided not to enforce price controls on a range of goods.

It is, in a way, beating the black market at its own game.

Parallel to this the government has expanded a program of direct distribution of subsidized food to the neediest, while obliging private companies to sell up to 50% of their produce to the state, at fixed prices.

Both these solutions have taken some pressure off what was a critical situation of food supply across the country.

But the fundamental problem remains. Venezuela imports almost everything it consumes, and it is fast running out of the hard currency it needs to pay for it.