Production of Coke halted in Venezuela for lack of sugar

Coca-Cola cartons are seen at a Carrefour hypermarket in Nice, France on April 6, 2016.
Coca-Cola cartons are seen at a Carrefour hypermarket in Nice, France on April 6, 2016. PHOTO: REUTERS

SAN FRANCISCO (Reuters) - The Venezuelan bottler of Coca-Cola has halted production of sugar-sweetened beverage due to a lack of sugar, a Coca-Cola Co spokeswoman said on Monday (May 23).

Venezuela is in the midst of a deep recession, and spontaneous demonstrations and looting have become more common amid worsening food shortages, frequent power cuts and the world's highest inflation.

Production of sugar-sweetened drinks has stopped, but output of diet drinks such as Coca-Cola light and other zero-sugar beverages continued, spokeswoman Kerry Tressler wrote by email.

The local bottler, Coca-Cola Femsa SAB, said it would issue a statement later on Monday. "Sugar suppliers in Venezuela have informed us that they will temporarily cease operations due to a lack of raw materials," Tressler added.

Over the past several years, the combination of price controls, rising production costs, lack of foreign exchange, restrictive labour laws, and a lack of basic inputs, such as fertilieer, have resulted in a drop of sugar cane production due to fewer planted hectares (acres) and lower yields.

Many smaller farmers have turned to other crops that are not price controlled and thus provide greater income.

The country is expected to produce 430,000 tonnes in 2016/17, down from 450,000 tonnes the previous year, and import 850,000 tonnes of raw and refined sugar, according to the USDA.