The acquisition of the refrigerator Breeders and Packers Uruguay (BPU) by the Brazilian company Minerva Foods continues to be delayed due to lack of opinion from the Commission for the Promotion and Defense of Competition of the Ministry of Economy and Finance (MEF); and concern grows National Meat Institute (INAC) in front of the position of the refrigerators of Brazil in the Uruguayan market.
When the purchase of the BPU by Minerva was confirmed, for a total of 40 million dollars, at the end of last January, the operation was already causing a stir in the Uruguayan meat sector: with the acquisition, the Brazilian company managed to occupy the 24.6% of the beef slaughter market —together with the other three meatpacking plants of the firm, PUL, Carrasco and Cannelloni-, that were added to the plants of another company in the northern country, Marfrig. Thus, the share of the slaughter market in Brazilian hands reached 51%.
Faced with this, INAC made a presentation to the Commission for the Promotion and Defense of Competition which, at the time, understood the concern as pertinent since the purchase of the BPU could affect free competition in the sectorat a time when Uruguay’s meat exports continue to fall —in April they plummeted 37.7% and reached a minimum in the last 32 months—, mainly due to lower demand for China —which, in turn, is a great trading partner of Brazil.
The MEF agency’s investigation put Minerva’s final completion of the acquisition on hold, but it has not yet issued a formal opinion on the matter.
The concern of the productive sector
The delay of the Commission for the Promotion and Defense of Competition, far from relaxing producers, has only increased tensions in the face of the possibility of a imbalance in bargaining power between the productive sector and industry, with more than half of the market in the hands of large Brazilian companies.
In this regard, the Vice President of INAC, Guido Machado, He pointed out that the institution has provided all the necessary information to the competent bodies in charge of making decisions on this issue so that they can advance in measures that protect national interests. From his perspective, the issue causes him “enormous concern” since “we must preserve competition, the free market and that there are no situations of market grab”.
According to the entity’s official, “there are American indicators that show that with this business we would leave a situation of comfort in terms of competition” due to the monopoly scenario with greater power of foreign business groups.
For Machado, “the government has the responsibility of defending the 45,000 producers who generate the meat that is industrialized and marketed through the meat processing industry. There are 45,000 producers that are fragmented throughout Uruguay and that the government has the responsibility to defend, that when these producers sell their product, which is the result of their enormous effort, they also have the security that there is an environment of free competition between those who demand the product that they have generated with a lot of effort, they and their family”.
When the purchase of the BPU by Minerva had already been completed, the vice president of INAC had warned that it was necessary “to try to circumvent the dominance of the market, which is very dangerous throughout the meat chain and all activities.” Meanwhile, as long as the Commission for the Promotion and Defense of Competition does not rule on the situation, the million-dollar business cannot finish materializing.
Source: Ambito
