Bloomberg News

Venezuela Protesters Block Access to Coca-Cola Plants

October 23, 2006

The Venezuelan unit of Coca-Cola Femsa SA said a group of protesters led by two ruling coalition lawmakers illegally blocked access to three plants and its administrative headquarters, the latest incident between President Hugo Chavez's supporters and U.S. companies.

The protests, backed by National Assembly Deputy Iris Varela, a member of Chavez's ruling coalition, and another lawmaker, are aimed at forcing Coca-Cola's local unit to pay severance benefits owed to former workers since at least 1998. Fomento Economico Mexicano SA, which has a majority stake in the unit, said Venezuelan courts in the past have ruled the demands have no legal basis.

The company ``is surprised by the fact that two members of the country's government are coordinating such actions, which we consider illegal and unconstitutional,'' Femasa, as Fomento is known, said in an e-mail statement from Monterrey, Mexico. ``The forum where these issues should be solved is in the courts.''

Varela told the state news channel that the protests may last indefinitely until Coca-Cola settles the debt. The company's Venezuelan unit, 45 percent owned by Mexico's Femasa, Latin America's largest beverage company, and 40 percent by Coca-Cola, has four plants, 33 distribution centers and about 7,000 workers.

The workers are among those who would suffer the most as a result of the protest, Coca-Cola Femsa said in the statement.

Varela and other Chavez supporters have accused U.S. companies of paying less to Venezuelan workers, who have threatened to boycott their products or protest in front of their offices.

To contact the reporter on this story: Guillermo Parra-Bernal in Caracas at at gparra@bloomberg.net

To contact the editor responsible for this story: Laura Zelenko at lzelenko@bloomberg.net


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