Weekly Report - 1 July 2010 (WR-10-26)

VENEZUELA | Heads roll in food scandal. Five senior officials at Pdval, the state food supply network, will face charges of corruption after the discovery of some 80,000 tonnes of food rotting in shipping containers at several warehouses in early June. The discovery was a major embarrassment for President Hugo Chávez who is engaged in what he describes as “an economic war" with private retailers, especially the country's principal food company Polar, which he accuses of pushing prices up to destabilise his government: food inflation stands at 40%. Pdval was set up by Chávez and the state oil company Pdvsa in January 2008, ironically, to fight food “hoarding". The food scandal comes in the midst of shortages of several staples and seriously undermines the government's claim that food supply can only be guaranteed if the state takes over production and distribution.