LONDON (ShareCast) - (Sharecast News) - Corrugated packaging company Smurfit Kappa said the Venezuelan government has taken control of its business in Venezuela for 90 days and detained two of its employees.
The Venezuelan government said last week that it had temporarily occupied Smurfit's subsidiary there, claiming that it has abused its dominant position in the market place. The government's price control agency, Sundde, said Smurfit's Carabobo site has impacted national producers with its prices and ordered immediate adjustments for all its products.

However, Smurfit was quick to refute the claims, saying they were "without merit".

In a statement on Wednesday, the company insisted that in the almost 80 years it has been in Venezuela, it has operated to "the highest business and ethical standards", adding that nine out of ten company unions last week confirmed their support and desire to continue working with Smurfit as a result of its "good labour practices and compliance with local law and regulations".

"As a result of this action by the government of Venezuela it is impossible for SKCV to manage its affairs in a way that complies with our normal business standards. Consequently, as of 28 August 2018, SKCV is not responsible for the use of its installations, machinery and equipment, its employees' safety, that of its surrounding communities, any environmental impact, or the quality of the paper and packaging manufactured in the operations.

"SKG's clear desire has been, and is, to continue operating a viable, sustainable and environmentally responsible business in Venezuela giving secure employment. In the event that the announced action continues, Smurfit Kappa Group is fully committed to protecting the interests of its stakeholders."

Smurfit said it is making "all possible efforts" to the secure the release of the two employees that have been detained.

At 1550 BST, the shares were down 1.8% to 3,232p.

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