Starting next month, it could be hard to get a beer in Venezuela. The country’s breweries depend on imported ingredients like barley and malt to keep their beer flowing. But strict currency regulations have made it nearly impossible for breweries to get their supplies into the country, Manuel Rueda reports for Fusion.
In an attempt to subdue out-of-control inflation, the Venezuelan government now forces companies doing international business to use U.S. dollars instead of the Venezuelan bolivar. There’s just one problem: falling oil prices now mean that U.S. dollars have become few and far between. That’s creating a real crunch for Venezuelan companies like breweries, who must buy U.S. dollars in order to do business with foreign markets or import goods into the country.
The Venezuelan government has failed to give enough U.S. dollars to companies even to import many basic goods, such as chicken, beef and toilet paper, Rueda writes. And in just a few weeks, beer might join that list as well.
Local brewers are already struggling to make ends meet. The industry owes about $200 million to foreign suppliers, Rueda writes, and industry leaders are warning of a crisis that could cost the country over 400,000 jobs.
“Beer shortages will essentially force our sector to go broke; beer accounts for 70 percent of our sales,” said Fray Roa, a spokesman for Venezuela’s National Association of Liquor Store Owners, in a press conference last week.
Even the black market won’t help solve the beer shortage, where the going rate for a dollar is more than 600 Venezuelan bolivares. That’s almost three times the highest rate that companies can buy dollars from the government, Rueda writes. While government-owned companies and a select few importers can buy dollars at the official rate (about 6.35 bolivares to the dollar), few private companies are allowed to purchase them at that price. As of now, 80 percent of the country’s beer supply is expected to evaporate by August 3 — a sobering thought for Venezuelan brewers.