Discusses pricing formula and other fees, value-added tax (VAT), etc.
Last Published: 2/17/2019

The Venezuelan government first implemented price controls in 2003.  In January 2014, the GBRV passed the Fair Prices Law that created the Superintendence for the Defense of Socio-Economic Rights (SUNDDE).  SUNDDE establishes price controls and profit caps for goods and services up to 30 percent depending on sector and applicable along the supply and product chains, including direct and indirect costs of the product for normal business expenses, including human resources, administration, purchasing, sales, marketing, IT, legal costs, and security.  (Official Gazettes 6.156 from 2014 and 6.202 from 2015).  The GBRV may enforce price control laws against businesses for actions of their independent businesses associations. For example, manufacturers may be held responsible for actions of independent distributors for which they do not exercise ownership or control if such distributors are deemed to have violated price control laws. Administrative sanctions include fines, occupation or seizure of goods or establishment for up to 180 days, among others. 

The GBRV has subjected an increasing number of food products and consumer goods to price controls.  Staple products under price controls include: rice, oatmeal, corn flour, bread, pasta, sugar, coffee, salt, beef, pork meat, poultry, eggs, sardines, tuna, corn oil, sunflower oil, vegetable blended oil, powdered milk, milk infant formula, white cheese, margarine, lentils, peas, black beans, mayonnaise, tomato sauce, and bologna.  The government has periodically adjusted the regulated prices for select items; however, according to producers’ associations, the increases have not been sufficient to cover production costs.  Mark-ups for products already on shelves or storage can be sanctioned by heavy fines, intervention, confiscation, store closure, or prison time.  As a result of price controls many products have disappeared from the market, sometimes temporarily but in other cases for long durations, and consumer hoarding is common.

Price controls are arguably the major reason for a growing contraband industry.  In addition to contraband, many individuals purchase quantities of scarce and price-controlled products and then sell them for higher prices in open markets throughout the country or in neighboring countries. 
 

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