Alimentos Polar, the Venezuelan company responsible for manufacturing 80% of the country’s beer supply, has officially shut down.
This shutdown comes after months of being denied the dollars necessary to buy malted barley, a necessary ingredient used for beer production. Like many other Venezuelan companies, Polar blames the government.
President Nicolas Maduro controls all private access to funds and uses a stringent currency exchange to hand them out. Venezuela suffers from the world’s highest inflation rate, and because of this many business owners find it impossible to import products from suppliers abroad.
Polar’s chief executive Lorenzo Mendoza has been demanding for weeks enough funds to supply his company.
The Wall Street Journal reports Mendoza saying, “Without approval and a supply of (foreign) currency to the suppliers, the company doesn’t have a way to operate. The company cannot go out and buy currency anywhere because it’s against the law.”
He warns that this closing can bring deep uncertainty to Alimentos Polar, including possible seizure by the state.
This isn’t just a hollow threat. Maduro’s government has taken over 1,200 companies in his tenure.
The president said closing of the beer plants was a criminal crime and that prosecutors should act. His only publicly proposed solution was to grow barley locally, which is impossible due to Venezuela’s climate.
This shutdown threatens to completely exhaust the supply of beer in Venezuela. These closures have already forced the company to lay off 6,500 workers, and when the beer supply runs out on May 6, an additional 3,500 will be out of work.
Additionally, Polar reports its suppliers are owed more than $380 million, with some waiting for as long as three years.
Even though the ripple effects of the closure is being felt by many small business owners throughout Venezuela, the use of illicit drugs and alcohol is becoming a worldwide epidemic. Everyday 100 people die from drug and alcohol overdoses, a rate that has tripled in the past 20 years.