President Hugo Chavez signed a decree to expropriate a French-owned retail chain Wednesday, accusing the retailer of improperly raising prices and hoarding goods after Venezuela devalued its currency.
The state takeover of Exito hypermarkets raised concerns of Venezuelan business leaders, who predicted private investment will decline as a result of the government's drive to expropriate stores involved in what it calls price speculation.
"Who is going to invest in a country where at any moment and on any whim ... a business can simply be expropriated?" said Ismael Perez Vigil, who leads the country's largest industrial chamber.
Chavez said his government would transform Exito, which is majority-controlled by the French company Casino Guichard Perrachon SA, into a chain of state-run stores that will sell products at cut-rate prices as part of his drive toward socialism.
"We are expropriating the assets, buildings and transportation that make up the Exito hypermarket chain," Chavez said.
The president signed the decree a day after the National Assembly, which is dominated by his political allies, gave initial approval to legislation that expands the government's authority to expropriate businesses for improperly raising prices.
Lawmakers also paved the way for the expropriation of a mall in downtown Caracas.
The newly built Sambil mall has been vacant and its entrances sealed for more than a year since Chavez announced in December 2008 that he planned to expropriate it. He said then that the mall was monstrous, would create excessive traffic and should instead be put to other uses by the government.
Government officials have yet to publicly discuss compensation for the owners of the mall or Exito.
Chavez has warned he will crack down on businesses that raise prices following the devaluation earlier this month of Venezuela's currency, the bolivar.
Government inspectors accompanied by soldiers have temporarily shut down more than 1,000 businesses this month, including Exito's six stores in Venezuela, accusing them of improperly raising prices. Authorities took over management of Exito's stores Tuesday.
The expropriation of Exito will expand the government's presence in retail sales. It has a network of state-run subsidized food markets and recently opened a business selling arepas — toasted corn cakes that are a common meal in Venezuela.
Chavez also has nationalized businesses in the steel, telecommunications, electricity, cement and oil sectors.
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