Venezuela's socialist government seized 4.8 million toys from a private company that is accused of under-reporting its inventory to sell some toys at higher prices.

The country's fair pricing authority seized the toys from three warehouses run by Kreisel, Venezuela's largest toy distributor, on Friday.

Two company executives have been detained on suspicion of promoting price speculation.

The government said it intends to hand the toys out as Christmas gifts to poor children this holiday season.

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A member of Venezuelan Armed Forces is shown walking among boxes of toys during an operation at a warehouse run by Kreisel, a toy distributor in Caracas, Venezuela on Friday

Members of the Venezuelan national guard stand next to boxes full of confiscated toys in one of Kreisel's warehouses in Caracas

Venezuelan President Nicolas Maduro is shown above during a meeting earlier this week

Agency director William Contreras said the seizure would teach companies 'that you can't play with the rights of Venezuelans.

The operation began on Thursday and law enforcement officials remained at the warehouse on Saturday.

Some of the confiscated toys were reportedly bought by Kreisel all the way back in 2008 and were kept in storage so they could be sold for a higher margin of profit, as high as 25,000 per cent, according to government officials.

The consumer protection agency has asked officials to prohibit executives at the company from being able to leave the country during the investigation.

Agency director William Contreras (pictured) alleged that Kreisel under-reported its inventory in order to sell some toys at higher prices

One Twitter user told CNN that the government is 'worse than Grinch' (shown above)

Another asked: 'Now what? Is Maduro the modern Grinch?'

Some critics called the consumer protection agency has become 'the Grinch that stole Christmas' because now families will not be able to buy the confiscated toys, according to CNN.

One Twitter user told CNN that the government is 'worse than Grinch.'

Contreras, however, said the executives at the toy distributor 'don't care about our children's right to have a merry Christmas.'

'They say we're stealing the toys from this company, but the company committed fraud against our country,' Contreras said.

Francisco Fernandez, Venezuelan Chamber of Commerce President, called the government's actions 'irresponsible,' saying that is endangering private property and discouraging the creation of jobs.

'This was plundering of inventory. The government didn't even respect the company's right of due process,' Fernandez told CNN.

The operation began on Thursday and law enforcement officials remained at the warehouse on Saturday.

Kreisel has not commented officially beyond responding to Twitter messages of support.

At this time, it is not clear if the confiscation will have an effect on the country's toy market in the run-up to Christmas.

Meanwhile, local supply committees will be in charge of distributing the toys 'fairly' to children, authorities said.

Venezuela has been wracked by a deep economic crisis accompanied by shortages of goods ranging from food staples to medicine.

In recent days President Nicolas Maduro ordered stores to lower their prices between 30 and 50 per cent.