Venezuela

Chavez and Brabeck, the neighborhood bullies

 

In response to the shortage of basic food products, the president of Venezuela, Hugo Chavez, threatened in early March to expropriate the milk processing plants owned in that country by Parmalat and Nestlé.

Some weeks later Nestlé president Peter Brabeck felt the need to respond to these threats, and he did so through the press: “We don’t see the issue of nationalization as a violation of the law, but as a governmental right,” he explained. “But we want to clearly stress the need for a just compensation,” and he recalled that when Nestlé businesses were nationalized in “Fidel Castro’s Cuba,” the company received adequate compensation. With their bravados, these two characters are behaving like the neighborhood bullies.

It’s quite clear that Chavez -an expert in the art of fireworks- won’t actually expropriate any company, and much less a transnational corporation. His threats are meant to quiet the cries of a highly consumer society that does not tolerate shortages, particularly when it comes to food.

Brabeck, for his part, is also bluffing, as he neglects to mention that ever since the suspension of diplomatic relations between the United States and Cuba in 1961, United States interests in Cuba are represented by Switzerland. You don’t get anything for free in this world, especially when you’re dealing with the Swiss. Among the costs that the Cuban government had to assume back then to secure Swiss support was, without a doubt, the payment of Nestlé’s compensation. So it was the Swiss government and not the company’s strength that made it possible for Nestlé to become one of the very few companies -maybe even the only one- to be compensated after being nationalized by the Cuban government.

It’s always good to tell it like it is.