Kellogg has announced it will discontinue its operations in Venezuela, blaming the country’s “economic and social deterioration”.
The company said product distribution in Venezuela has been suspended and the license agreement for the use and commercialisation of its brands has been terminated.
Kellogg has operated in Venezuela since 1961, and the market is its second largest in Latin America after Mexico. Its facility in Maracay, in the north of the country, employs around 300 people.
Under the backdrop of strict price controls and hyperinflation, Kellogg is the latest multinational to exit the country.
In a statement, Kellogg said: “The current economic and social deterioration in the country has now prompted the company to discontinue operations. All assets, contractual obligations and legal guarantees have been settled with Kellogg’s employees, suppliers and customers in Venezuela.”
It added: “Kellogg continues to be committed to Latin America, and we look forward to resuming operations in Venezuela in the future, as soon as the conditions of the country allow it.”
After the announcement, president of Venezuela Nicolás Maduro said that legal actions will be taken against Kellogg.
“I’ve decided to hand the company over to the workers so that they can continue producing for the people,” he said.
“We’ve begun judicial proceedings against the business leaders of Kellogg’s because their exit is unconstitutional.”
Maduro accused the company of trying to threaten his chances of becoming reelected in the country’s upcoming presidential vote which takes place on Sunday.
© FoodBev Media Ltd 2018