It happens to be Coca-Cola's colour, but the red banners draped outside a distribution plant in west Caracas offer the company no comfort. That red belongs to President Hugo Chávez and Venezuela's socialist revolution.

Nor can the company feel sheltered by the high walls surrounding the site. Every inch has been painted with murals depicting historic scenes of indigenous tribes and patriots expelling foreign interlopers with axes and swords.

The soft drinks giant, a symbol of America and globalisation, is feeling the edge of what Chávez calls "21st-century socialism": extended state control over the economy and controls over private companies. The president has threatened to oust Coca-Cola delivery trucks from this plot of land in Catia, a slum in the capital, to make way for housing for the poor. "We have to accelerate the transition to socialism," he said.

It is the latest initiative in a sweeping campaign of evictions, expropriations and nationalisations launched since Chávez won a referendum last month abolishing term limits. The former tank commander has declared a new phase in his decade-long effort to transform his South American state into a leftist beacon and challenger to US-led capitalist hegemony.

"By going after big symbols like Coca-Cola, he is sending a message he will take on anyone," said Luis Vicente Leon, director of the polling firm Datanalisis.

In addition to consolidating power, the president was lining up to blame the private sector for Venezuela's looming economic crunch, he said.

In recent weeks, the government has seized a rice plant belonging to Cargill, the US food multinational; two plants owned by Empresas Polar, Venezuela's largest private company; and a eucalyptus plantation owned by the Irish paper-packaging giant Smurfit Kappa.

Troops and civilian government supporters have also taken control of several big private farms. The government hopes to boost production of scarce staples, such as white rice, and tame runaway inflation with price controls. Earlier bouts of nationalisation have focused on other "strategic" sectors such as oil, steel, cement and telecommunications.

The measures are popular with Venezuelans, who accuse private enterprises of profiteering. "We need a strong government to control their excesses. If they can't or won't produce enough, then the state should do it," said Jean Tovar, 30, a street trader. His apartment balcony overlooking the Coca-Cola car park was draped in a red banner. "Good riddance," said Tovar. "Their trucks block traffic. And the drink is full of chemicals."

Since railing against Coca-Cola in his weekly TV show, Chávez has softened and said he wants an amicable deal over the disputed Coke distribution site, one of 32 centres run by Mexico's Femsa.

Comparisons have been made to Salvador Allende's Marxist-tinged push in 1970s Chile but there is an element of theatre to Venezuela's socialist drive.

The media-savvy president thunders against a company, troops seize property, the revolution garners wide attention. But Cargill and Smurfit Kappa, for instance, have dozens of unaffected sites and are likely to be compensated for the ones that have been seized.

Venezuela remains a nation of baseball-obsessed, beer-loving materialists. Billboards for cosmetic surgery, bank loans and satellite TV programmes, such as the Playboy Mansion series and 24, loom over highways.

Steve Ellner, author of Rethinking Venezuelan Politics: Class, Conflict, and the Chávez Phenomenon, said he did not think the intention was to eliminate all capitalist enterprise: "If the Venezuelan government can achieve some kind of modus vivendi in which it can implement nationalist and popular measures but at the same time get the private sector to co-operate, he may well tolerate private large-scale ownership."

However, other analysts warn of a meltdown caused by plunging oil revenues. Last year, oil accounted for 93% of government export income and half its overall income. Austerity is inevitable.

Headlines about expropriations have spooked foreign investors, said Jose Guerra, a former central bank director. "Frankly, I don't see why anybody would invest in Venezuela."

To fill the void left by the retreating private sector, oil revenues have supported thousands of worker-run farm and factory co-operatives. Official statistics about their fate are scant and the government declined interview requests for this article. Anecdotal evidence is not encouraging: abandoned fields and derelict factories are testament to mismanagement and corruption.

Alida Bastidas, 54, a "social controller" at garment-making co-operative Venezuela Avanza, said government contracts had made the Caracas factory a success. Last month, it made 50,000 referendum campaign T-shirts, she said: "Here we are all equal. We work with pride, with dignity." Four seamstresses listening in exploded in anger. "Lies, lies," shouted Rosa Gonzalez. "The bosses don't pay us on time, they steal. It's a fiasco."

From 280 workers four years ago, the staff has dwindled to 74, but that was kept from Chávez when he hosted an episode of his TV show from the site, said Myrta Miller, 38. "We weren't allowed to tell him what was really going on."