Quote:

---

Venezuela's biggest beer producer, food and drink giant Polar, is also the country's largest company still in private hands after President Hugo Chavez's nationalisation drive.

Last week, Mr Chavez stepped up his attacks on Polar's billionaire owner, Lorenzo Mendoza, whom he has previously accused of pushing up food prices by hoarding products to cause artificial shortages.

For its part, Polar has called the allegations "absurd" and "senseless".

But that did not stop the authorities seizing 114 tonnes of food which they said had been illegally stored in Polar warehouses in the city of Barquisimeto last month.

In his latest broadside, Mr Chavez said he was declaring an "economic war" on Venezuela's "stateless bourgeoisie" and made it clear that Mr Mendoza was in the firing line.

"I'm not afraid to nationalise Polar, Mendoza, so be careful," he said.

"Let's see who lasts longer - you, with your Polar and your riches, or me, with my people and the dignity of a revolutionary soldier."

---

Quote:

---

Venezuelan economist Angel Alayon, of food industry body Cavidea, says that the government now controls 75% of coffee production, 42% of maize flour, 40% of rice, 25% of cooking oil, 52% of sugar and 25% of milk.

The government says it has a duty to secure food supplies and to prevent what it sees as "economic sabotage" by private companies.

But so much of the economy is now in state hands that businessmen such as Fernando Morgado, head of the National Council of Commerce and Services (Consecomercio), have called on the government to take responsibility for Venezuela's economic decline and stop blaming the private sector.

The country's economy contracted 5.8% in the first quarter of this year compared with a year earlier.

The International Monetary Fund predicts that its GDP will shrink by 2.6% in 2010, making it the only Latin American economy, and the world's only oil exporter, to see a contraction for this year.

---

Quote:

---

The coffee industry is certainly a case in point. At the start of the 20th Century, Venezuela was the world's second-biggest coffee exporter, but it is now importing significant amounts of the stuff for the first time in its history.

Coffee producers say price controls imposed by Mr Chavez meant the price they were getting for their crop did not cover production costs.

They found they could get twice as much for their crop in neighbouring Colombia, giving some of them the incentive to smuggle out as much as they could.

At the same time, those price controls took away the incentive to invest in the industry, so new trees were not planted in response to the shortage.

In August last year, the government acted by taking over the coffee roasting plants of Fama de America, which had a 30% share of the market.

However, the plants do not have enough locally-grown raw material to operate at full capacity, so imports are still necessary.

---