Venezuelans Rush for TVs on Devaluation as Colgate Sees Net Hit

Daniel Cancel and Jose Orozco
Tuesday , January 12th, 2010

Venezuelan consumers are rushing to buy flat screen televisions before prices jump, while U.S. companies including Colgate-Palmolive Co. brace for profit declines after President Hugo Chavez devalued the currency.

Shoppers picked through half-empty shelves at the Game-Zone electronics store in Caracas yesterday after a surge in demand drove up sales 70 percent over the weekend, said salesman Xavier Manrique. Colgate, the world’s largest toothpaste-maker, forecast a charge of up to 6 cents a share each quarter this year and Clorox Co., the biggest bleach maker, said it expects as much as $30 million in Venezuelan currency-related losses.

Chavez’s threats to seize businesses that raise prices following the first devaluation in five years may deepen shortages by making companies hesitate to restock, said Juan Pablo Fuentes, an economist at Moody’s He forecasts inflation could reach 60 percent, the highest since 1996 and more than double the government’s forecast.

“It’s going to be a tough year,” Fuentes said in a telephone interview from West Chester, Pennsylvania. “The devaluation has an immediate impact on consumers. You’re going to see a sharp contraction in consumption, which is the main driver for GDP.”

Full article here

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Venezuelans Rush for TVs on Devaluation as Colgate Sees Net Hit  FOTR 340x1692 

View the original article at Prison Planet


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