Venezuela extends price controls to tackle inflation

Venezuela is introducing more price controls in a bid to tackle inflation, on course to be 27 per cent this year, the British Broadcasting Corporation reported on Wednesday.The prices of 18 products, including soap and shampoo, were being frozen with immediate effect, while other sectors would be examined in the coming months. Firms, including multinationals like Colgate and Pepsi-Cola, would have to report production costs so officials can set what was deemed a fair price. President Hugo Chavez said the aim was to "protect people from capitalism." Under the price control law, officials would set prices after taking into account production costs including raw materials and wages. Price controls were first introduced in 2003 and staples like cooking oil and rice were currently regulated. The law widens the number of goods being monitored, including fruit juice and mineral water, as well as cleaning products such as detergent. Toilet paper, toothpaste and disposable nappies were among toiletries and personal items on the price control list. In a television call to state television, President Chavez urged the Venezuelan people to keep an eye on prices, mentioning several international companies by name. "The market has become a perverse mechanism where the big monopolies, the big trans-nationals and the bourgeoisie dominate and ransack the people," he said. Among the multinationals operating in Venezuela, Procter and Gamble said it was evaluating the measures and would continue to serve Venezuelan customers "to the best of our abilities", spokesman, Mr. Paul Fox told the Bloomberg news website.Business leaders had expressed concern that more regulations would cut investment and exacerbate shortages of products in high demand.The authorities said companies were guilty of charging too much and controls were needed to end speculation.High levels of public spending and currency controls were among the factors contributing to inflation, analysts said. President Chavez, who had been treated for cancer, was set to stand for re-election in October next year.
Click here to read full news..