January 11, 2015

McDonalds in Venezuela can't get french fries?

Ah, socialism!  In socialist Venezuela, McDonalds has run out of french fries.

That should make you curious:  Was there a potato famine in Venezuela?  No.  McDonalds imports its fries from either the U.S or Argentina.  Apparently Venezuela doesn't grow enough potatoes to be a reliable source.

Okay, we know the rest of the world didn't run out of potatoes, so what's the explanation?  Turns out that Venezuelan companies wanting to import goods must get official permission from the government to exchange the local currency for dollars, at one of three official exchange rates set by the regime. 

Different commodities qualify for either more or less-favorable rates.  And if a government bureaucrat doesn't like you, you'll have a much harder time getting a favorable rate.  In which case your imported goods could cost two or three times what they did last time.

But wait:  Other fast-food chains in Vz are still selling fries.  How did they manage to keep getting imported fries at a good rate but McDonald's couldn't?

Gee, it's a mystery.  I suspect that if you contributed ten thousand dollars to Maduro's slush fund your request for dollars at your previous exchange rate would sail right through.

Meanwhile in Venezuela, McDonald's has adjusted by offering fried cassava.  Customers aren't impressed.

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