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The Venezuela Food & Drink Report Provides Independent Forecasts and Competitive Intelligence on Venezuela's Food and Drink Industry

Posted on: Friday, 11 April 2008, 09:00 CDT

Research and Markets (http://www.researchandmarkets.com/reports/c88497) has announced the addition of "Venezuela Food & Drink Report Q1 2008" to their offering.

In the face of falling real incomes and food shortages, Venezuelan consumers had to adapt their purchasing decisions over recent months. Fresh foods have remained the most popular food choice, partly owing to the fact that they are cheaper than many processed or packaged foods, but also because they are considered to be healthier and tastier. As a consequence, some processed and packaged food categories have experienced declining sales.

These include most prominently frozen foods, where sales are estimated to have declined by around 5% in 2006 and per-capita consumption during the year was as low as 185g. Sales of frozen vegetables are considered to have declined most strongly, at a rate of around 11% in 2006, followed by frozen red meat (-8%) and frozen poultry (-4%). The dairy products sector was also hit particularly hard by the economic difficulties - prices have increased significantly as a result of increased reliance on imported products, with domestic producers having restricted their investments. The situation has been further emphasised by the falling value of Venezuela's currency.

A product sector that has not been subjected to price controls because it is not considered essential are snacks and meal replacements. Sales suffered significantly at the height of economic turmoil in 2003, but have meanwhile stabilised owing to the fact that prices have remained comparatively low and a significant proportion of consumers appears to have chosen to consume more snacks, while reducing traditional food consumption. Food shortages do, however, remain a key problem for Venezuelan consumers. According to a survey carried out by the newspaper El Nuevo Herald, 73% of respondents admitted having difficulties finding sugar, 52% had problems finding beef, and more than 45% were unable to find powdered milk and chicken.

With President Chavez tightening his grip on power, the situation can not be expected to improve over coming months. Consumer price inflation picked up again in October 2007, reaching 2.4% month-on month (m-o-m) compared with 1.3% m-o-m in September, bringing the year-on-year (y-o-y) rate to 17.2%, and no cooling in prices is expected any time soon against the background of domestic supply constraints.

Consumers will continue to be attracted to the government-subsidised Mercal retail chain for basic purchases, putting further pressure on both food and drink manufacturers and mass grocery retailers (MGRs).

Companies Mentioned:

- Alimentos Heinz CA

- Bunge Ltd

- Cargill de Venezuela.

- Coca-Cola FEMSA

- Empresas Polar

- Grupo Bimbo

- Makro Venezuela

- Mercado de Alimentos (Mercal) CA

- Pernod Ricard Venezuela

- SACI Falabella

For more information, visit http://www.researchandmarkets.com/reports/c88497

Source: Business Wire

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