By Will Grant

BBC News, Caracas



Chavez issued stern warnings to businesses not to raise prices

Venezuelan leader Hugo Chavez has seized control of a foreign supermarket chain, Exito, after he accused the company of hiking its prices.

The joint French-Colombian supermarket chain was guilty of breaking Venezuelan law on price controls and would now pass into state hands, Mr Chavez said.

He said any other company increasing prices also risked nationalisation.

Exito was among more than 200 stores accused of raising prices during the country's recent currency devaluation.

The supermarket chain had already passed under temporary government control after the devaluation.

But now President Chavez has taken it a step further.

Accusing the Exito group of "violating numerous Venezuelan laws", Mr Chavez said he had ordered the expropriation of the supermarket chain.

'Socialist' supermarkets

"How much longer are we going to allow transnational companies to come here to speculate with our prices?" the Venezuelan leader asked viewers of his weekly TV programme, Alo Presidente.

He went on to say that fines and temporary closures were not sufficient to prevent such alleged abuses and that the country's commerce minister, Eduardo Saman, should consider expropriating more frequently as a deterrent.

So far there has been no comment on the move from the Exito supermarket chain, which is a joint French and Colombian-owned company.

It comes as Venezuela's trade relations with Colombia are particularly poor following a dispute over Colombia's decision to grant the US access to seven military bases on its soil, something Mr Chavez strongly opposes.

Mr Chavez suggested that Exito's hypermarkets in Venezuela could become part of a newly announced "Corporation of Socialist Markets" which is intended to provide everything from restaurants to car dealerships at heavily subsidised prices.