By Dan Molinski
Of DOW JONES NEWSWIRES

CARACAS (Dow Jones)--Venezuelan authorities discovered nearly 1,200 shipping containers full of rotten food at a state-run warehouse and have arrested a former top official in the government's Socialist food distribution network.
The discovery of the 30,000 tons of out-of-date milk, rice and wheat flour at the warehouse in the port city of Puerto Cabello is seen as a blow to President Hugo Chavez, who has been blaming opposition forces and private industry for a recent rise in food shortages.
Chavez, addressing the issue in a speech Tuesday night, said the food was left to go bad due to "mistakes, inefficiency" and "bureaucracy" within the government, but also said corruption was likely involved. He promised his administration would prosecute those responsible with the full weight of the law.
"This [case] gives me much pain," Chavez said. "But they've got to go to prison, whoever they are."
The Attorney General's Office said in a statement that it arrested on Tuesday Luis Enrique Pulido, the former president of PDVAL, a state company that controlled the warehouse and was created two years ago with the specific aim of resolving nagging shortages of groceries.
Charges will be filed against Pulido for crimes related to the rotten food, the statement indicated, without detailing specific charges.
The expired food was discovered almost by accident when authorities, responding to a report of theft at the PDVAL-controlled Cealco warehouse, stumbled upon a back lot and found the rotten food.
An official at Cealco in the northwestern city of Puerto Cabello, reached by telephone Wednesday, confirmed the rotten food was discovered at the warehouse, which she said is owned and managed by the government.
The case comes at a bad time for Chavez' Socialist government, which in recent weeks has been saying it aims to eventually grab full control of food production and distribution in the country. The government says private industry is to blame for a scarcity of products often seen on grocery store shelves throughout the country, and says government control of the industry would resolve the problems.
With key congressional elections three months away, Chavez has accused the country's top food company, Empresas Polar, of "hoarding" food with the specific intent of creating shortages and destabilizing the economy to turn voters against ruling party candidates.
Last month, the government sent the National Guard to confiscate more than 100 tons of food from a Polar warehouse in the city of Barquisimeto, claiming it was hiding the food rather than distributing it to grocery stores.
Polar denied the accusations, and said constant government inspections of its warehouses would make it impossible for the company to hide food even if it so desired.
Despite the discovery of the rotten food, Chavez said the government's food distribution network that includes PDVAL and Mercal, a chain of subsidized grocery stores for the poor, will continue to provide inexpensive food to millions of ordinary Venezuelans.
"In the seven years since we created Mercal, and later PDVAL, we have imported 7 million tons of food and 4 million tons that was bought within the country," Chavez said. "This food has been distributed to 20,000 stores throughout the country."
-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738; dan.molinski@dowjones.com

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