Two managers at FTSE 100 firm Smurfit Kappa have been arrested in Venezuela over allegations of corruption.

Venezuela’s consumer protection body, Sundde, said it had arrested Luis Fernando Lugo Díaz, comptroller at the company, and Cipriano Ramón Betancourt Chirinos, sales manager, who are accused of speculation, boycott, extraction of contraband, corruption, non-compliance with rules around pricing and “selling or offering goods or services at prices higher than those determined in the Organic Law of Fair Prices”. Venezuela fixes prices for certain products and services under this law, which stipulates that profit margins should not be greater than 30 per cent of the cost.

Sundde said Smurfit Kappa, an Irish packaging company, is the largest cardboard producer “at national and international level”, and accused the firm of practices which were “destabilising” to the economy.

On Tuesday, Sundde ordered the group to immediately adjust its prices for all its products and accused the company of refusing to sell to certain local businesses.

Sundde said in a statement: “It is important to point out that Smurfit Kappa's businessmen were carrying out discriminatory practices, as to whom the products offered by this cardboard production company are offered, avoiding selling to state companies located in the region, as well as the elimination of one of the lines of production, violating the labour stability of its workers, who have had an obligatory cessation of activities for six weeks.”

Smurfit Kappa said it “entirely refutes these allegations and believes them to be without merit”, and added that the company has operated in Venezuela since 1986 to “the highest business and ethical standards”.

The company also said its Venezuelan operation represented less than 1 per cent of group earnings in the first half of this year.

The arrests come as the South American country grapples with rocketing inflation and widespread food shortages.