- 2 hours ago
- Business
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A sugar shortage has forced Coca-Cola to stop producing soft drinks in Venezuela amid an escalating food and energy shortage.
Coke said that suppliers in Venezuela will "temporarily cease operations due to a lack of raw materials".
The announcement comes after the country's biggest brewer, Empresas Polar, closed plants due to a barley shortage.
Venezuela's economy has contracted sharply as oil prices plunge.
A Coca-Cola spokesperson said the company would continue producing sugarless drinks such as Coca-Cola Light (Diet Coke).
"We are engaging with suppliers, government authorities and our associates to take the necessary actions for a prompt solution," she said.
Sugarcane production has been falling due to price controls and rising production costs, as well as problems in obtaining fertiliser.
As a result, many smaller farmers have turned to other crops that are not price controlled and thus generate higher income.
Venezuela is expected to produce 430,000 tonnes of sugarcane in 2016/17, down from 450,000 tonnes for the previous 12 months, and import 850,000 tonnes of raw and refined sugar, according to USDA figures.
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The economic problems have forced many consumers to queue for hours to buy basic foodstuffs.
Venezuela's economy is expected to shrink by 8% in 2016 after it contracted by 5.8% last year.
Its reliance on oil to generate foreign currency and investment has made it a victim of regular recessions.
President Nicolas Maduro has instituted a state of emergency in an effort to combat the economic crisis. Critics argue it is an attempt to strengthen his grip on power.
Meanwhile, tyre maker Bridgestone said on Monday it was selling its Venezuelan business after six decades in the country.
The company's Venezuelan assets will be sold to Grupo Corimon.
Other multinational firms such as Ford, Procter & Gamble and Halliburton have either slowed or abandoned their investments in Venezuela.
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