The fate of Lácteos Los Andes, cont.


BRPMS7fCUAAownJ-1.jpg-largeBack in April, State-owned dairy Lácteos Los Andes was in pretty critical shape, according to its workers. Almost four months later, it got worse.

Company-staff held a protest on Monday in front of the Vice-President’s offices, asking the government to rescue the firm. They said Los Andes only has enough stocks to keep going for two more weeks.

Days ago, the company reported an increase in production last month, something immediately denied by the workers. Distributors have reported at least a 50% reduction in the shipment of products like milk, juice or yogurt (in the case of UHT-processed products, the drop reaches 60%). They have witnessed a drop in finished products since January.

During a recent workers’ assembly, they explained what are the reasons behind Los Andes’ low production: mismanagement, overdependance on imports (most of the fruit pulp for juices comes from China) and an expired collective bargaining agreement since three years.

Raúl Rodríguez, high-ranking member of the workers’ union puts the blame on “…capitalists who control the company, which offer no answer to the shortage of raw materials.”  So that makes sense then…

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  1. Wait a minute, they want the government to save the company from the bad management of the government? My head spins

  2. Wait a minute, do we need to import the fruits and pulp juices from China too?

    That is just sooo wrong in so many levels, a country like Venezuela where we can name at least a dozen of fruits that could well be produced here. I mean you have the land, plenty of water, lovely weather. This is so depressing…

    • Justo jctt, un país donde los mangos se pudren en el suelo porque no hay quien los recoja. Mas o menos lo que pasa con las monedas ( y que fuertes) que se caen al suelo y no son recogidas por su escaso poder adquisitivo.

      • Eso me recuerda el chiste cubano sobre los arabes que quieren implementar el comunismo y estos le dicen… pero cuando se acabe la arena… alli si va a ser dificil

  3. Being the idiots they are, most of the managers the Government put in those companies do not have a clue on how to run a succesful company nor are interested in becoming awfully rich (Even more) while also producing stuff for internal consumption.

    The ammount of profit they can make from those companies is huge, but most of those guys are happy with just stealing away from the money the company has destined to things like buying raw materials. Most of the issues Venezuelan state owned companies can be tracked to a surprising lack of competitiveness, a lack of will to punish the guys that run those companies, there is no threat of sending them to jail because, unlike with a private company, the money does not come from the guys in charge so they loose nothing, besides the guys managing those companies are the friends or descendants of someone in power.

    A lot of people in charge need to learn how to make money besides from the usual “Let’s deviate some of the funds to my personal account”.

    • one would think that even if the ulterior motive is to deviate funds into their own personal accounts it would still be in their best interest to make the company profitable and sustainable. What future is there for someone skimming off the top of a company that’s headed for ruin? I guess the ineptitude outweighs the corruption?

      • But can they make the company profitable? The government sets prices which make profit almost impossible. China might be an alluring model for how managers ought to run public enterprises, but China doesn’t set prices for every item under the sun and when they do set prices they are profitable prices! The basic incentives for a Chinese SOE manager are completely different than a Venezuelan SOE manager.

        In Venezuela if you get $1 million dollars you can throw it away in a loss making enterprise or you can steal it. In China you can invest it in a profit making enterprise and turn it into to $2 million, as well as pay yourself a handsome salary.

        • There is a threshold where you stop loosing money and making it, even with the low prices set by the government, after you past it then you can start making a really big profit from those companies, specially when you take into account that most of the imported raw materials (We are talking about a government company here, a company that won’t have many issues with CADIVI) are actually really cheap to buy and give you an (unfair) edge over the private companies. The idea here is that a company like “Lacteos Los Andes” could get an even larger market share if its managers would stop thinking small.

          In business, you have to go big or go home. In the end, the managers could make much more money than what they make by just stealing from the current money destined to buy raw materials and equipment. It’s not like the Venezuelan government will come to the defence of a competitor like Parmalat or Nestlé.

      • Exactly, a lot of people that are running and bankrupting state-owned companies are not really worthy of being called “White-collar criminals”, they are more comparable to petty thieves, because while the ammount of money they steal is huge, it is nowhere as large as the ammount they could make if they just focused on making the company grow.

        Yes, their ineptitude (And conformism) outweighs the corruption and their greed. They are just happy with being a somewhat rich guy in a country with a poor population.

  4. As a posada we buy hundreds of litres of Naranjada monthly, especially during temporadas.
    Naranjada is a mixture of 60% OJ mixed with water & toms of sugar added sold in plastic jugs of 1.8 litres.

    It currently is in very short supply however if Los Andes is on the shelf we refuse to buy it.
    Many times if you buy 6 bottles 3 or 4 will be off or bad even if there is lots of time before the expiry date.
    That indicates to me that there is bacteria in the manufacturing process.
    Even if it’s OK the taste is really weird.

    Right now we only buy California (the best of all of them) or Frica.

    What we really want is 100% OJ but that hasn’t been on the shelves for well over a year.

  5. A relative years ago went into the business of growing watermelons , he invested in irrigation, in fertilizer , weed killers , the whole hog and got a bumper crop . then he went to sell it . He discovered that there were a small clique of conationals ( non venezuelans) who had the monopoly on trucks who could carry the watermelons to the city markets . They had among themselves fixed the price of the watermelons so that you coulnt even cover the cost of collecting it from the ground . This relative tried renting a truck to take what he could of the watermelons to sell it on the street ( the clique controlled access to the market) , the take was so miserable that he decided to let the rest of the crop rot. Way to go agricultural entrepeneur. , hard work and following the profit incentive isnt always so rewarding !! The government stinks but sometimes the markets also stink . Because we have such terrible govt regime we might be tempted to overrate the virtues of a magnificently free market economy . but to be balanced lets also give a good look at the ways of local private enterprise . Specially when it is protected by govt interference or neglect from fair competition. Often businesses are the victims of govts but othertimes they are the predators of the public !!

    • Why bother regulating watermelon producers when the socialist utopia of unlimited watermelons is right around the corner?

    • In a free market economy, he could rent a truck from someone else. Free market does not mean cartels and monopolies are the norm, but the barest of exceptions.

      • The economics of renting a truck to an out of way place on a non regular basis might ruin the economics of water melon growing . In Venezuela unfortunately cartels and monopolies are often part of the economic scenery . Its a small market and the spirit of competition is not always there , instead you have ‘roscas’ which culturally are omnipresent in Venezuela and wield an enormous amount of influence in all spheres of life.!! In Venezuela cronyism is rampant !!


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