The Commission for the Promotion and Defense of Competition of the Ministry of Economy and Finance (MEF) published the resolution where it details and argues its decision to definitively approve the purchase of the refrigerator Breeders and Packers Uruguay (BPU) by the Brazilian Minerva, and defined as “low” the probability that the acquisition will modify the Uruguayan slaughter market.
Despite the complaints and claims of the local sector due to the high level of concentration that the definitive purchase of the BPU by Minerva will mean —a 51% of the bovine slaughter market in the hands of Brazilian companies, if one also considers the percentage of Marfrig—, The Commission for the Promotion and Defense of Competition finally gave the go-ahead to the operation, after several months of coming and going.
According to the document released by the MEF entity, “the probability that the concentration will modify the market characteristics so that coordinated behaviors would appear, after ruling out the evidence of pre-existing coordination in the investigations carried out by the Commission; to catalog the degree of concentration between ‘low’ and ‘medium’ (depending on the relevant market in question)”.
The official report also mentions a study presented by ATHN Foods Hold SA —of Minerva Foods— in which it was concluded that the purchase of the refrigerator belonging to the Japanese company NH Foods “did not generate competitive issues nor did it translate into dominance”, while “it generates efficiency gains through savings and cost reduction, geographical decentralization of production, an improvement in the use of installed capacity, diversification of the product portfolio, access to new markets and sources of financing, and the improvement of the credit risk profile for the purchasing party”.
In any case, the economic advisers who prepared the report taken by the Commission for the Promotion and Defense of Competition recommended monitor market behavior relevant, given the degree of participation of the two predominant economic groups in the national work. However, the conclusion was that, at least for the moment —and considering the purchase of the BPU by Minerva—, a concentration situation is not generated that puts at risk the free competition in the market.
Yesterday, after several months of delay, the Commission for the Promotion and Defense of Competition finally approved the purchase of the BPU by Minerva. “Minerva SA, leader in South America in the export of beef, informs its shareholders and the market in general, in continuity with the Essential Fact disclosed on January 31, 2023, that the Uruguayan competition authority issued unrestricted approval for the acquisition of Breeders and Packers Uruguay SA (“BPU Meat”), a subsidiary of NH Foods Group (“NH Foods”)”, reported the same Brazilian company.
The decision of the Defense of Competition had taken longer than initially expected and had generated discomfort among local producers because they were not called to give their opinion in a process that affects the distribution of the slaughter market in Uruguay.
The measure was corrected by the MEF in June and consulted the Chamber of the Refrigeration Industry, Association of the Refrigeration Industry of Uruguay, Livestock Shippers Association Yet the Union of Meat Sellers of Uruguayin addition to INAC and the Ministry of Livestock, Agriculture and Fisheries (MGAP). These last two state agencies expressed their concern about the concentration of the sector in foreign hands.
Minerva announced the purchase of BPU at the end of January. The operation will add to the company Brazil a daily slaughter capacity of 3,700 heads. Thus, the Brazilian firm will keep 24.6% of the market in Uruguaysince it also has three other refrigeration plants: PULL, carrasco and cannelloni.
With the confirmation of the purchase of the BPU, most of the national work remains in the hands of two multinationals originating in Brazil: Minerva Foods and Marfrig, which together own 51% of the beef slaughter market in Uruguay.
Source: Ambito
