Venezuela Plans “Merry Christmas” through Strict Price Controls
EspañolOn November 1, the Christmas shopping season officially began in Venezuela. The Superintendency of Fair Prices (SUNDDE) has launched its 2014 Merry Christmas Plan, and took to social media to promote the initiative, using the Spanish hashtags #NavidadAPreciosJustos and #NavidadesFelices.
The plan coincides with the government’s economic strategy, informally known as the Dakazo, that mandates stores maintain “fair prices” on key items. The idea is to protect the end-of-year Christmas bonus Venezuelan employers are obliged to pay their workers.
To ensure the policy is being followed, President Nicolás Maduro has ordered audits be conducted throughout the country. The government sent out Círculos de Lucha, inspection teams consisting of 27,100 inspectors, 700 attorneys, and military officers, to certify sales are conducted at prices set by the state.
In one day alone — Friday, October 31 — the government conducted 331 audits in Venezuela, as confirmed by SUNDDE through their official Twitter account.
— Sundde (@sundde_ve) November 1, 2014
“The Merry Christmas Plan is providing results. We are not going to allow store owners to speculate and play with the salary and Christmas bonuses of the people. We have to protect that salary,” said Superintendent of Fair Prices Andrés Eloy Méndez.
According to the Venezuelan government, the audits are meant to prevent businesses from holding monopolies or engaging in price gouging. Barbie dolls, for example, that were being sold in Venezuela for 2,999 Bs. (US$29.39) before the audits are now price locked at 553 Bs. (US$5.42).
Inspectors are also on the lookout for products missing price tags, irregular invoices, “speculative” profit margins, or lack of a visible cost structure and inventory rotation policy.
Auditors plan to visit shopping malls throughout the country and inspect any store that may sell items related to the holiday shopping season, including food and hygiene products. They will also ensure every item is marked according to its Maximum Fair Price (PMVJ).
According to Finance Minister Rodolfo Marco Torres, nationwide fairs organized as part of the Merry Christmas Plan will use biometric scanning to make sure “food reaches all Venezuelan families.”
However, Mauricio Tancredi, president of the National Council of Commerce and Services, has said the audits and mandatory sales in 2013 led to shortages and a lack of investment for businesses. He further suggested business owners, while cooperating with authorities, are concerned about the future effects of these audits.
Scarcity of Economic Freedom
In 2013, President Maduro ordered military forces to occupy the electronic retail chain Daka, forcing them to sell at “fair prices.”
Authorities arrested Daka store managers on suspicion of price gouging, and hundreds of Venezuelans rushed to their stores hoping to buy electronics “on sale.” The state reduced the price of kitchen appliance, for example, by 77 percent. One year after the Dakazo, the retail chain has yet to recover: inventories are low, products are scarce, and the number of employees have been significantly reduced.
A similar situation played out on Friday, October 31, at the General Import store in downtown Caracas. After President Maduro announced the “sale” over a television broadcast, the public rushed and formed lines outside the store’s doors, even though it remained closed throughout the weekend.
The doors opened on Monday, November 3, at 5 a.m. local time, and more than 600 people entered the store to shop at government-issued prices. Military officers monitored the sales, limiting customers to three items per person, and only one item of each kind.
Customers complained about the store’s lack of inventory, especially the shortage of popular dolls. By Wednesday, all Barbie dolls and Max Steel toys sold at the regulated price were sold out in all eight General Import stores.
Edited by Guillermo Jimenez.