Mattos warned of the risks of rejecting the Minerva-Marfrig merger

Mattos warned of the risks of rejecting the Minerva-Marfrig merger

The minister of Livestock, Agriculture and Fishing (MGAP), Fernando Mattos, referred once again to the situation of possible concentration of the refrigeration industry in Uruguay from the purchase of three plants of Marfrig by the company—also Brazilian— Minerva; and considered that opposing the purchase operation—or refusing to approve it, in any case—“can have negative consequences” for the country.

Both the refrigeration industry and government authorities, Minerva’s announcement about the important operation it carries out in the region set off alarm bells. Not only because the purchase of 16 refrigerators in South America makes the Brazilian company the most important in the sector; but because 3 of those 16 operate in Uruguay, and contribute to Minerva being able to control 45% of the local bovine slaughter market.

This concern was expressed by the president of the National Meat Institute (INAC), Conrado Ferber, on more than one occasion, but the minister Mattos unmarked himself of his latest statements. In dialogue with Radio Carve, the leader pointed out that “INAC must align itself with the position of the Executive power”.

“I share the line, perhaps not the depth in the analysis because I believe that there are other issues that we must be cautious about, we have to give guarantees, the Uruguay “It is a country that goes out into the world to sell investments, it is a country that has to provide guarantees of due process,” Mattos warned about the public position taken by the government and how that can affect the image of the country.

A similar position was expressed by the president Luis Lacalle Pouwho shared the concern of the livestock sector about the trend towards concentration of the meat processing industry, but insisted that the final decision on whether or not to approve Minerva’s operation will depend on the analysis of the Commission for the Promotion and Defense of Competition of the Ministry of Economy and Finance (MEF)and that it will be technical and not political.

Mattos also referred to this, who pointed out that the Commission advises the Executive Branch, so it will be the government that must listen and analyze in depth the technical aspects presented, as well as “listening to all the voices to make a decision that is not easy, because tell you that an investment is not an issue“But we are going to wait without generating excessive pressure on the ruling.”

Without ignoring the concern of the entire livestock sector about how the business will affect the market, the head of the MGAP recognized that “it is also true that a refusal to an operation of this nature can generate undesired consequences, for example, that there are not many cases of plant closures in Uruguay, but it is an extreme that can occur. It’s not that they want it or look for it, but here is one of the big problems that the industry has historically caused, which is a overrun very important and a idle capacity level that has not been able to be reversed despite the evolution of the livestock sector.”

Can the government put conditions on Minerva?

Asked about the government establishing some conditions to approve the business between Minerva and Marfrig, Mattos considered that “it would be healthy”. In any case, he considered that “you have to see the meanders and extremes of legal requirements that can be taken, but it seems to me that we clearly have interference with regard to an instrument that the industry has used, which has been extended unemployment insurance.”

In that sense, the minister pointed out that “it would not be reasonable that if Minerva acquires the administration, ownership and administration of 7 plants, it would have 3 or 4 shutdowns at the same time, it would not be something reasonable and that the State still has to put money to finance”.

He extended unemployment insurance system “It is a mechanism for the purpose of maintaining the link of employment and dependency of these industries to be able to overcome exceptional market or livestock supply situations in the meat processing industry that do not allow the normal operation, the leader highlighted.

“Now it is different when this could be used to regulate demand, regulate supply, there we have to analyze it based on the result we have. I do not believe that, furthermore, this company that is investing significant money because it is a large operationis doing it to get a market margin. The plants are acquired to make them work and make them active, take advantage of the quotas, take advantage of the background and take advantage of the brand because each of these plants come with brands that are internationally known,” Mattos insisted.

Source: Ambito

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