Venezuelan Government Gets Tough On Price Gouging Retailers

DAVID GREENE, HOST:

And let's go now to Venezuela, where the government has taken over a nationwide chain of electronics and appliance stores that it accuses of price gouging. With inflation soaring in the country, Venezuela's socialist government is warning that more takeovers might be on the way.

LINDA WERTHEIMER, HOST:

John Otis reports.

JOHN OTIS, BYLINE: Venezuelan troops have occupied five stores belonging to the Daka chain, where they have arrested store managers and slashed prices. The result has been a crush of people outside the shops, some of whom camp out the night before hoping for bargains before all the DVD players and washing machines are gone.

In a speech Saturday, President Nicolas Maduro accused Daka of marking up prices by as much as 1,200 percent.

PRESIDENT NICOLAS MADURO: (Foreign language spoken)

(SOUNDBITE OF SHOUTING IN FOREIGN LANGUAGE)

OTIS: Is this normal inflation or is this induced inflation? Maduro asked his audience.

Maduro was elected in April following the death of longtime socialist President Hugo Chavez. But the new leader has been struggling. Maduro claims unscrupulous businesses interests are waging an economic war on his government by hoarding goods and jacking up prices. Annual inflation has jumped to 54 percent.

But many economists blame government mismanagement. For example, price controls have reduced incentives for farmers and factory owners and one result has been shortages of milk, chicken, flour and toilet paper.

Meanwhile, currency controls that ration the sale of U.S. dollars to businesses make it harder for them to import goods. Many have had to buy dollars on the black market, where the rate is 10 times the official exchange rate. To avoid selling at a loss, they boost retail prices.

With local elections coming up next month, Maduro is scrambling to get the economy under control. In his speech, he vowed: We're going to comb the whole nation in the next few days. This robbery of the people has to stop.

For NPR News, I'm John Otis. Transcript provided by NPR, Copyright NPR.