Kellogg pulls out of Venezuela as economic crisis intensifies ahead of elections

Venezuelan President Nicolas Maduro waves to his supporters during a rally in Caracas Venezuela on Jan. 23 2018

Venezuelan President Nicolas Maduro waves to his supporters during a rally in Caracas Venezuela on Jan. 23 2018

The United States based cereal maker Kellogg is pulling out of Venezuela because of the economic deterioration in the country.

Kellogg confirmed later on Tuesday that its manufacturing plant had been seized by the leftist government, the latest company to jump ship amid Venezuela's tough business climate.

President Nicolas Maduro, who is standing for re-election, told a rally that he would hand control of the factory over to the workers.

Kellogg's joins multinationals including Bridgestone, Kimberly-Clark and General Mills that have closed or reduced operations in Venezuela amid hyperinflation, shortages and a recession deeper than the Great Depression of the 1930s.

Maduro blames Venezuela's crisis on an "economic war" he says is waged by Washington, greedy businessmen and coup-mongers.

"We've begun judicial proceedings against the business leaders of Kellogg's because their exit is unconstitutional", Maduro added to cheers from red-shirted supporters.

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"The current economic and social deterioration in the country has prompted the company to discontinue operations".

Kellogg is the latest multinational to close or scale back operations in Venezuela, citing strict currency controls, a lack of raw materials and soaring inflation.

The food giant is just the latest worldwide company to partially or completely close shop in the troubled and chaotic nation, following others such as Kimberly-Clark kmb and Colgate-Palmolive cl .

"Maduro is giving away everything he can because these countries' backing, especially from Cuba, is all the political support he has left", a former top Venezuelan government official told Reuters on the condition of anonymity.

Corn Flakes may be even scarcer in Caracas.

The company said product distribution in Venezuela has been suspended and the license agreement for the use and commercialisation of its brands has been terminated.

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