Chávez bought the Casino but couldn't hit the jackpot

The 'eternal commander' of the Bolivarian Revolution wanted to have his chain of socialist supermarkets and to that end he ordered the expropriation of the Éxito Stores in 2010, which he believed to be Colombian. By the time he found out that they belonged to the French Casino Group, it was too late: the Paris government had intervened and obtained not only a hefty payment for the business, but also helped retain a French participation in what became Abastos Bicentenario. Seven years later, when the supply chain languishes, the French continue to sell up to 3,000 tons a year of non-food products through a company in Panama. 

18 June 2017

Just by setting foot in any of the state-run Abastos Bicentenario is enough to verify the decline of what once was one of the main chains of supermarkets in Venezuela. For example, the branch in Terrazas del Ávila, east of Caracas, has poor lighting, damaged refrigerators, endless rows displaying the same product, employees wandering the aisles and empty shelves crowned with political propaganda. The picture is mirrored in other establishments of the capital that still remain open.

It is a failure difficult to conceal, even, for the Government. "Abastos Bicentenario is rotten, so I say and order a complete and absolute restructuring", Nicolás Maduro admitted in February 2016. In a rather late effort to rescue this food network, Maduro has just named Ramón Campos Cabello, captain of the army and cousin to the runner-up in the Chavismo, Diodado Cabello, as president of the supermarket chain.

The recognition of the President of the Republic came weeks after intelligence agencies carried out a police operation that ended up in the arrest of executives and employees of the company.

Six years had passed since Hugo Chávez ordered the expropriation of the hypermarket chain Éxito, a company owned by the French group Casino. "Anyway, I already said that: the owners of the chain Éxito must look for the minister (Eduardo) Samán, Vice President Elías Jaua (current Minister of Education), because the chain now belongs to the Republic, considering the many violations of the Venezuelan laws it has committed" Chavez said on a Sunday in January 2010 during one of his everlasting television shows.

That was the bicentennial year: two centuries of the patriotic rebellion of April 19 had passed. Fueled by the oil boom and in the midst of a nationwide upswing, Chavez wanted his own network of "socialist" supermarkets, with which he would "drop all the prices of the chain." "The name must be changed, of course", he insisted heavily so that no doubts of his determination remained.

The name has to be changed, of course

Chavez's bright idea was fulfilled at all costs. The revolutionary commander believed at first that this decision would affect Colombian interests, because the brand Éxito comes from the neighboring country. But back then he did not know that the French of Casino Group were behind the business, who in the end came off better than anybody else from what, at first, projected the sinister shadows of a compulsive expropriation: Casino not only received a considerable compensation for its Venezuelan operation and maintained a minor share in Abastos Bicentenario; but also, as it has been revealed more recently, it has continued to serve behind the scenes as a provider to the Venezuelan government through a company created in Panama exclusively to such purpose.

The name of the holding company Anis Services is repeated in the list of suppliers of the Venezuelan Corporation for Foreign Trade (Corpovex). This company is responsible for state imports: it is a Panamanian company that was born through the collaboration of the directors of the Casino Group in Venezuela, the only winners, perhaps, in the midst of a history full of corruption and managerial inefficiency that led the fantasy of Abastos Bicentenario to an end.

An expensive geography lesson

Anis Services was registered in Panama on July 12, 2010. It had only been six months since Chávez expressed his intention to take over Éxito Hypermarkets, which together with the supermarkets Cada -being the latter a traditional chain that had previously passed through the hands of the Rockefeller family and the Cisneros Organization-, belonged to the Chain of Venezuelan Stores (Cativen). The decision of the Venezuelan warlord came on the recommendation of the then Minister of Commerce, Eduardo Samán, known for his ill will towards private initiative. All of this started as a measure of pressure on Colombia following the clashes between Chávez and the then president Álvaro Uribe Vélez. That's what the Venezuelan authorities thought: they were misled by the label Éxito, a company of Colombian origin. But it wasn't so. The rumble, in fact, reached France.

Since the end of the 1990s, Cativen's majority share was owned by the Colombian company Almacenes Éxito, which in turn was owned by the Casino Group, that is why Cativen was among the assets of the French company. "It was a measure of retaliation against Colombia, but Chavez's relations with France were good and after the announcement of expropriation began the negotiations because France considered it an aggression", reports a source who worked at Grupo Casino and asked to remain anonymous.

This mistake costed Eduardo Samán his position in the cabinet in February, 2010, just one month after the official announcement of the expropriation was made. The mistake also led the Venezuelan government to enter into negotiations with the Casino Group, something unusual among the expropriations ordered by the commander of the "Bolivarian revolution". Today the documents of the agreement and the ruin of Abastos Bicentenario confirm that the best part was for the French. "The approach was very different because Chavez did not want his image with France to be damaged", says the former Casino executive.

The documents endorse that version. By the time the company was set up in Panama on July 12, 2010, the Casino Group and the Venezuelan authorities had already signed a "Protocol of Intentions" (March 5, 2010), a "Memorandum of Understanding" (May 1st, 2010) and an "Agreement of Principles" (June 2, 2010). The tone of Chavez himself had changed in February when he stated that "they (Casino) want to sell to Venezuela 80% of the shares in Cativen (...) I have approved the proposal and I have authorized the Vice-President (Executive) to start the process". He even pointed out that "we would do a mixed company, with a Venezuelan majority".

But the plans of the French company were different and for that purpose they needed the company in Panama. "A company was intentionally set up in Panama to be responsible for the advisory service agreed in the talks with the Government", acknowledges another former executive of the Casino Group, who knew that operation.

Originally, the Panamanian firm was managed by Pascal Rivert and Laurent Zecri, former French executives of Cativen, representatives of the Casino Group. From April 20, 2015 both left the board and Anis Services was left in the hands of Joseph Claude Kalifa and James Levy, who are also related to the French conglomerate. Kalifa was the architect of the successful negotiation with the Venezuelan government and Levy is deputy director of Zecri in the board of Abastos Bicentenario.

The "kalifa" of the casino

The presence of Kalifa in Venezuela and in the Casino Group was that of a ghost. "I had never heard of him before. He could have been someone recommended by the Government of France, by the secret services or simply someone close to the authorities of the Casino Group headquarters", says one of the former executives of Casino in Venezuela. Precisely, Kalifa agreed with the Venezuelan authorities the terms of something that began as an expropriation and ended in a juicy sale contract, signed in November 2010. "Kalifa carried the negotiation with the high government externally of the Casino Group", says the former executive.

According to that document, Kalifa represented Grupo Casino by means of a power of attorney "granted by Jean Charles Naouri in his capacity as legal representative and chief executive officer of Casino Guichard Perrachon SA, signed on November 3, 2010". Kalifa's booming business: Chavez's government ended up paying Grupo Casino 690 million dollars for 80.1% of the shares that were paid in four payments, according to the contract signed by Richard Canán, successor of Samán in the Ministry of Commerce, and Kalifa himself as legal representative for Casino. In March 2010 the head of the French conglomerate at global level informed that the "talks between Casino and the Government to consider a procedure of amiable transfer and no expropriation are ongoing." Naouri could taste the success in the negotiation.

The shares package bought by Venezuela was transfered to the Ministry of Food, while the other 19.9% was left to the French. "Kalifa managed to achieve the agreement all by himself and, I suppose, with all the legal and financial support from Casino in France", points out another executive who dealt with that process. The purchase of the majority share allowed the government to manage 39 supermarkets, 6 hypermarkets and one more that was being built in Zona Rental of Plaza Venezuela in Caracas and was finally inaugurated by Chavez in 2012.

The supplier behind the curtains

The agreement with the Venezuelan Executive was only one part of Kalifa's mision. With Anis Services, Kalifa also became a supplier behind the curtains of Abastos Bicentenario and Corpovex. Although it was from April 20, 2015 when Kalifa and Levy - the Irish citizen who became acting director of the Board of Directors of Abastos Bicentenario - took up the post as proxies of the Panamanian company, in January of that same year, they signed the first trade agreement, according to the National Contractor Registry (RNC). 

In the contract it was agreed that they would supply "food and personal hygiene products" to Abastos Bicentenario between January 5, 2015 and December 31 of that year, but the agreement was fulfilled in 70%. The business relationship between Anis Services and the Venezuelan government was only just beginning.

Between January 2016 and February of this year, Anis Services has dispatched to the state-owned Corpovex scores of products such as detergents and toilet paper that the company buys from manufacturers in different parts of the world and then resells them to Venezuela, according to traffic and ocean cargo databases. These dispatches added up around 3,000 tons of products like floor and clothes cleaners and toilet paper that packed the shelves of Abastos Bicentenario. Last year, in many of the branches of the state-run network, both in Caracas as in some located in the interior of the country, Spanish detergents were marketed, among others products coming from Anis Services. Prices were above the regulation set by the national executive, who since then wanted to avoid the overcrowding of consumers at the doors of the commercial outlets to hunt for cheap products that would later be resold in the black market.

The 3,000 tons sold by Anis Services to the Venezuelan Government for Abastos Bicentenario represent a good part of the goal that the state-run network planned to distribute in 2016 under the category of "non-food products". According to Report and Accounts of 2015 addressed by the Ministry of Food - last available -, the plan was to market 4,918 tons in "non-food products" by the end of the 2016 fiscal year.

What happens is that currently we are not making any trades management

In the company headquarters located in Torre Parque Cristal, Caracas, they preferred to decline the interview request for this coverage. "The thing is that we are not currently conducting any kind of commercial management", a woman replied by phone. "We are not conducting any type of commercial activity at the moment, we are not in operation, there's just one person in the office that is the secretary, that is me, there is nothing here", she insisted when asked about the sales of Anis Services to the Venezuelan Government and the relationship with the French conglomerate Grupo Casino.

Apart from starting as a supplier to the Venezuelan Government, in 2015 Kalifa also opened a subsidiary of Anis Services in Cuba, according to the company's file kept in the Public Registry of Panama. That happened in October 12 of that same year and to that end Edgar Antonio González Martínez was appointed as the "legal representative" of that branch, who acted as the Venezuela's chargé d'affaires in Havana. On April 28, 2017 the appointment of González Martínez as the legal representative of Anis Services in Cuba was "revoked".

Martial failure

The future of Abastos Bicentenario is unknown. There is no news of the restructuring announced by Maduro in February last year. One thing is sure, the administration of the company remains in the hands of the military. Since June 1, the president is Ramón Rafael Campos Cabello, a captain of the army, according to presidential decree 2,889, published in the official Gazette 41,163. Campos Cabello has held other public positions and is also cousin to the deputy and chavism runner-up, Diosdado Cabello.

Campos Cabello succeeds José De Freitas Jardim, another military man who came to Abastos Bicentenario at the beginning of last year, precisely, to rearrange the company, as requested by Maduro. In practice, there has been a kind of slow-motion liquidation with at least 10 closed shops and thousands of layoffs. It is something that comes as second nature to Jardim, since he just liquidated the Industrial Bank of Venezuela (BIV), one of the oldest financial institutions in the country, broke and restored multiple times during Chavismo. "That man (Jardim) came to do exactly what he did at the Industrial Bank, he came to shut down the company", says a union leader who is among the 3,000 workers laid off since 2016, almost half of the 6,274 employees that once had Abastos Bicentenario at the closing of 2015, according to the Report and Accounts of the Ministry of Food for that year.

With Campos Cabello in charge there are no expectations of change. "Abastos Bicentenario is broke, in the red. The French could even regain the company at a ridiculously cheap price if they wanted" insists the union leader, who has an ongoing litigation with the company and awaits its re-engagement.

Military boots have walked the aisles of Abastos Bicentenario basically since the day Chavez made public his intention to expropriate Hipermercados Éxito. "The military came in a very authoritarian and arrogant fashion, but in those days they could not make operational decisions because they didn't know anything about the business", recalls the former executive of the Casino Group, regarding the tension that was felt as the military forces were taking over the subsidiary branches throughout the country to fulfill Chavez's order.

The military arrived with a very authoritarian and arrogant style

The saga of military in the company officially began in February 2011, when the Venezuelan government completed the last payment to the Casino Group agreed in the sale contract. The first president of Abastos Bicentenario was Rafael Coronado Patiño, a brigadier-general who years ago was deputy minister for Food. In that first board was also Félix Osorio, another military man who ultimately was Minister for Food. With them, precisely, the smell of putrefaction began in a business in which, paradoxically, the French of Casino Group stroke the best deal.

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