Refusal to purchase Minerva to Marfrig It was made official this Tuesday, after the resolution published by the Commission for the Promotion and Defense of Competition (Coprodec), which considered that eventual approval “would lead to the creation of a dominant position and a highly concentrated market.”
The organism dependent on Ministry of Economy and Finance (MEF) issued today against the operation of three plants for approximately 130 million dollars, as it did with the acquisition of Bimbo group to Pagnify, considering that, Minerva could reach 43% of the Uruguayan work.
The 36-page Coprodec report detailed that Minerva and Marfrig each represent 26.5% of the market, while together with Pando Group and Las Piedras Refrigerator They concentrate 70% of the total industry.
The request occurred “in a sector that has experienced increasing and recent concentration and that would take place between two groups that own multiple slaughter plants. cattle in Uruguay”, said the MEF body.
When listing the effects on the market for the purchase and sale of cattle destined for slaughter and the market for the purchase and sale of beef, He indicated that “companies could have the ability to transfer the impact of greater sales capacity to the negotiations that develop in the livestock market.”
If the operation had been completed, Minerva would concentrate 43% of the market, Defense of Competition maintained and highlighted that it would reach 2,660 points in the Herfindahl-Hirschman index (HHI), which qualifies a market as “highly concentrated” exceeding the threshold of 1,800 points.
Minerva’s posture
From Minerva, which had initially asked for caution, they considered that the decision is based on “hypothetical effects and mere assumptions,” maintaining that “there is no evidence that competitive impacts”.
“Minerva does not hold and will not hold a relevant position in the reference markets”, The firm maintained, as appears from the resolution, pointing out that Coprodec made “an incorrect definition of the relevant markets.” In fact, they considered that “the principles of reasonableness and proportionality have been violated.” So far it has not been revealed whether or not the company will appeal the decision.
Source: Ambito
