The agency dependent on the MEF warned about “possible anticompetitive effects” if the acquisition is validated.
The Commission for the Promotion and Defense of Competition (Coprodec) denied the request for authorization of economic concentration of the Bimbo group, who had requested the purchase of Pagnify, property of Linzor Capital.
After your decision about the operation Minerva-Marfrig, the organism dependent on Ministry of Economy and Finance (MEF), considered that the acquisition would violate article 9 of Law 18,159, which prohibits “the abuse of dominant position, as well as all practices, conduct or recommendations, individual or concerted, that have the effect or object of restricting, limiting, hindering, distorting or impeding current or future competition in the relevant market.”
“As a result of the evaluation and assessment of the factors that have been incorporated in the analysis, both by the interested parties and by the administration itself and the third parties consulted, there are sufficient evidentiary elements,” argued the Coprodec in Resolution No. 61/024, to which he had access Ambit.
In the text, the organism dependent on the MEF indicated that “possible anticompetitive effects and the efficiency gains associated with the operation”, while they indicated that the operation was going to take place in “a market that is already highly concentrated.”
Specifically, if the purchase is completed, it would lead to the formation of a company that would have a market share of close to 70%, which would “substantially reduce competition,” said Coprodec.
The proposal had generated crossovers between the company and the union
When requesting the acquisition, Bimbo group argued that it sought to “continue growing in the development of its brands and products”, considering that “the foundations are laid to export the successful business model of Pagnify to the world, a process in which Bimbo will have a key role in bringing work and Uruguayan talent”.
At that time, they considered that “their briefcase are essentially complementary” and argued that “both companies compete with several other bread brands and countless bakeries throughout the country, so the operation will not generate anti-competitive effects.”
However, the Bread Coordinating Table issued a statement warning about the possible loss of jobs, recalling that Grupo Bimbo “bought Cuban Master and Ricard and, far from consolidating them, it led to their closure with the subsequent impact on jobs.”
“From the sector we fight for the continuity of Surprising (the only company that Grupo Bimbo has today in Uruguay) and Pagnitify as independent efforts,” the union stated at that time.
Source: Ambito
