March 11 (Bloomberg) -- Venezuelan President Hugo Chavez’s “21st Century Socialism” is failing to rein in billionaire Lorenzo Mendoza.

The fortune of Mendoza and his family surged to $3.5 billion from $2 billion last year as he fended off threats by President Hugo Chavez to nationalize his food conglomerate, Empresas Polar SA, the country’s largest privately held company. Mendoza, one of two Venezuelan billionaires, climbed to the world’s 258th wealthiest person from 334th in 2009, according to Forbes magazine’s billionaires list released yesterday.

Chavez, a 55-year-old former paratrooper turned socialist, moved to take Mendoza’s minority stake in a grocery chain this year after seizing one of his rice plants for three months last year, saying it failed to comply with government production quotas. Mendoza managed to grow his wealth as the South American country sank into its third recession in the past 11 years.

“Chavez has him in his crosshairs,” said Rafael Alfonzo, former president of Caracas-based Alfonzo Rivas & Cia, a food company that competes with Polar. “It hasn’t been easy to dodge these attacks.”

Mendoza, 44, the third-generation of his family to run Caracas-based Polar, controls a consumer products giant that sells the nation’s leading brand of beer and the corn flour used to make arepas, the flat cakes that are a staple of the Venezuelan diet.

MIT Graduate

A 1993 graduate of the Sloan School of Management at the Massachusetts Institute of Technology, Mendoza has run the family company since 2002, three years after Chavez took office. The family’s wealth sank to $2 billion in 2009 from $6 billion in 2007 before rebounding this year, according to Forbes.

The magazine’s report on Mendoza provided no explanation for his increase in wealth. A Forbes spokeswoman said she had no additional information immediately available yesterday.

Polar holds about a 77 percent stake in the beer market, Eduardo Hernandez, director of Cerveceria Polar, told Caracas- based Producto magazine in November. Its Harina P.A.N. corn flour is on the shelves of supermarkets throughout the country. Venezuelans rarely go a day without consuming a Polar product from ice cream to malts to its Toddy chocolate milk. It also distributes PepsiCo Inc. products in Venezuela, South America’s biggest oil-producing country.

Polar sponsors seven of the eight professional baseball teams in the country and umpires wear patches for its Savoy chocolate brand, according to Jose Grasso, president of the league. The national baseball championship trophy is called Maltin Polar, after the company’s malt beverage, he said.

‘Icons’

“Their products are icons of Venezuelan society,” said Luis Vicente Leon, director of Caracas-based polling group Datanalisis and an adviser to Polar.

Chavez’s nationalization drive, buoyed by record oil prices, first focused on multinational firms in the energy, cement, utilities and metals industries, including Exxon Mobil Corp., Cemex SAB and Banco Santander SA.

Following his first electoral defeat in a referendum to reform the constitution in 2007 amid widespread food shortages, Chavez turned his attention to the food industry, including Polar. Chavez, who often says that being rich prevents people from going to heaven, accused Polar this year of “sabotage” by hoarding food and curbing production.

“If Polar refuses to continue to supply food, I could make a decision that you won’t like, Mr. Mendoza,” Chavez said in a televised speech on Feb. 19. “This would be with respect to the whole company. I don’t have any problems.”

Stores Seized

The government stepped in and sought to eliminate Polar’s stake in Caracas-based Cadena de Tiendas Venezolanas SA, known as Cativen. The venture, majority-owned by France’s Casino Guichard Perrachon SA and including Colombia’s Almacenes Exito SA, controlled six Exito retail stores in Venezuela and 35 supermarkets.

Chavez seized the six shops in January after saying the company raised prices following a currency devaluation. On Feb. 13, he said he reached an agreement with Casino to hold an 80 percent stake in Cativen, a deal that may push Polar out. Polar responded with a statement saying it had increased food sales to Cativen by 85 percent in January and that the company was producing at full capacity.

Last year, Chavez ordered the government to occupy a Polar rice plant for 90 days to enforce output of products that his government sets consumer prices on. The president has cited Mendoza’s decision to join a general strike in 2002 as an attempt to undermine his government.

Cisneros Family

Mendoza declined to comment for this story, said a Polar spokesman, who declined to be identified in accordance with company policy. A spokesman at Venezuela’s Communications Ministry said no one was available to comment.

In an interview in 2008, Mendoza said the possibility of Polar being nationalized was “nonsense” and called for more dialogue between industry and the government. Food shouldn’t be “politicized,” he said.

Gustavo Cisneros, the head of Cisneros Group and the wealthiest Venezuelan family, has reduced his dependence on the local market by branching out into media overseas. Cisneros’s wealth grew to $4.2 billion from $3.8 billion last year, according to Forbes.

Polar may boost exports or make acquisitions abroad to diversify beyond Venezuela, Datanalisis’s Leon said.

“Mendoza isn’t safe from Chavez,” said Leon. “But I think he’s known how to act to defend the interests of his company.”

To contact the reporters on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net; Corina Rodriguez Pons in Caracas at crpons@bloomberg.net