CARACAS, Oct 29 (Reuters) - Workers at a Nestle plant in Venezuela said on Wednesday they had begun striking over wages, shutting the factory as sky-high inflation complicates operating conditions for businesses in the South American nation.
The roughly 780 worker-strong union at the El Tocuyo factory in the western state of Lara voted on Tuesday to walk out after contract negotiations that started in March failed to end in a deal, union leader Jesus Dominguez told Reuters.
The OPEC country's annual inflation rate of 63.4 percent in August, the highest in the Western Hemisphere, is eating into Venezuelans' purchasing power and has become a hot-button issue at the negotiating table.
Dominguez said Nestle, the world's biggest food maker, offered a 50 percent salary increase, while workers demanded a 65 percent increase to keep up with price growth.
"We're asking that increases be based on inflation... so that money doesn't evaporate from our hands," Dominguez said on Wednesday.
El Tocuyo, one of five plants Nestle has in Venezuela, produces cereals, culinary products, beverages and coffee. Dominguez said workers had decided to keep packaging cereals that had already been produced to avoid any health issues.
"We are working closely with the trade union and the labor authorities to resolve the situation rapidly," said Meike Schmidt, a Nestle spokeswoman based in Vevey, Switzerland.
The stoppage is another sign of operating difficulties for private companies in Socialist-run Venezuela. Currency controls have stymied imports while fixed prices for certain goods have dissuaded production.
U.S. cleaning products maker Clorox Co last month announced it was exiting Venezuela, saying that it would sell its assets because business was not viable.
Various multinationals, from Colgate-Palmolive Co to Avon Products Inc, have been warning of hits to their balance sheets and are scaling back operations in Venezuela.
Reporting by Alexandra Ulmer and Brian Ellsworth in Caracas; Additional reporting by Caroline Copley in Zurich; Writing by Alexandra Ulmer; Editing by Alan Crosby