Who

  • William Contreras, Venezuelan Consumer Protection Agency
  • Kreisel, largest Venezuelan toy distributor

What – The Venezuelan CPA confiscated and estimated 3.821 million toys from distributor Kreisel under allegations that Kreisel had underreported its inventory in order to sell their toys at higher prices than allowed by the Venezuelan government. The CPA alleges that Kreisel purchased toys as far back as 2008 and stored them for sale at a much higher price. The actions have been criticized by some as a violation of the company’s right to due process.

When – December 10, 2016

How – The toys were seized from three separate warehouses operated by Kreisel

Why – Toys are regulated products that must be sold at government-approved prices under Venezuela’s socialist government. Therefore, Kreisel’s alleged plan to inflate prices is illegal.

General Background – Venezuela is currently facing a horrible economic crisis caused by the plummeting prices of oil worldwide. Revenues from petroleum exports make up approximately 50% of Venezuela’s GDP and 95% of all Venezuelan exports. Inflation has reached 500% this year and may hit 1660% in 2017, according to the IMF. In addition, there have been chronic shortages of staple foods such as rice, flours and chicken as well as shortages of medical supplies for hospitals. 

What’s Next – The Venezuelan CPA has stated that it will be making all of the toys available to families in impoverished Venezuelan neighborhoods at lower-than-market prices.

Sources

http://edition.cnn.com/2016/12/10/americas/venezuelan-government-toy-seizure-grinch/index.html

https://www.theguardian.com/lifeandstyle/2016/dec/10/venezuela-toys-kreisel-christmas-gifts-poor

https://en.wikipedia.org/wiki/Economy_of_Venezuela

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