Venezuela Shuts Down Nearly All McDonald's

The Venezuelan government has ordered nearly all McDonald's restaurants in the country closed for 48 hours for what it calls irregularities in the fast-food chain's financial books.

Fernando Llano / AP A man walks past a closed McDonald's restaurant at a mall in San Cristobal, Venezuela, Friday, Oct. 10, 2008.

The tax agency said it ordered more than 100 McDonald's restaurants temporarily shut on Thursday. Agency head Jose David Cabello announced on state television that "inconsistencies" were found in sales and purchases books, as well as in taxes collected. The restaurants will be allowed to reopen on Saturday.

Of the 132 McDonald's restaurants in Venezuela, 118 were closed, including all 80 of the outlets run by Caracas-based franchisee Alimentos Arcos Dorados de Venezuela CA, spokesman Rolando Chavez told The Associated Press on Friday.

Arcos Dorados — "golden arches" in Spanish — said it has obeyed Venezuelan laws and regulations and is abiding by the sanctions. It said the order stemmed from "formal issues affecting purchasing and sales records."

Under President Hugo Chavez, the tax agency has carried out inspections of companies and frequently punished those it says aren't complying with rules. Both domestic and foreign businesses are regularly affected.

The agency took a similar action against McDonald's three years ago, ordering a three-day closing of 80 restaurants as a penalty for allegedly failing to follow tax rules. Last year, the Venezuelan subsidiary of Coca-Cola Co. also was shut down for 48 hours, and last month, the offices of Pepsi were ordered shut for the same period.

Chavez's supporters often accuse U.S. companies of exploiting Venezuelan workers and have called for boycotts in the past against the likes of Coca-Cola, McDonald's and Nike.

But analyst Pedro Palma of the Venezuelan economic consulting firm MetroEconomica said the closing of the Oak Brook, Illinois-based McDonald's shouldn't be interpreted as an attempt to pick on U.S. companies.

"They've closed many Venezuelan businesses also," Palma said, noting that tax inspectors often take such measures for even minuscule record-keeping lapses.

Despite political tensions between Chavez and Washington, Venezuela is a major importer of U.S. goods. Trade between the two countries grew to more than US$50 billion last year, much of that in Venezuelan oil sales.

Three businesses that operate McDonald's restaurants were fined some US$535 each, tax agency chief Cabello said, according to the state-run Bolivarian News Agency.

Arcos Dorados says it is the largest fast-food restaurant manager in Latin America, with more than 1,700 locales in 18 countries.

Cabello said two other franchisees, Alimentos Nasif CA and Compania Operativa de Alimentos-Corp CA, were affected by the shutdown, the state news agency reported.

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