The Administrative Council for Economic Defense (KED), on Wednesday (7), approved the conclusionThe acquisition of Chocolates Garoto by Nestlé, after 21 years of stagnation. The agreement is conditional on a series of “behavioral remedies” to maintain competition in the national chocolate market. Will traditional love singing ever end? Will the factory close? Will new products be launched?
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Kidd explained that this term “behavioral therapies” corresponds to measures related to the company’s internal activity, such as, for example, obligations to do and not to do. This means some conditions for approval of the acquisition of Garoto by Nestlé.
Among them is that for five years Nestlé will not be able to acquire assets that, cumulatively, represent a participation equal to or greater than 5% of the market. The obligation does not apply to international purchases.
Another clause in the agreement obliges Nestlé to notify Cade, for a period of seven years, of any acquisition of assets that characterize the act of concentration in the national chocolate market, below the 5% threshold.
Other criteria conflicted with the work and future of the Garoto plant in Vila Velha. See below how Cade’s decision affects Garoto.
Will the Garoto plant in Espiritu Santo be closed?
no. One of the conditions imposed in the Cade agreement prohibited the sale of the Garoto factory, located in the Glória district, in Vila Velha. Nestlé has never expressed interest in closing the Capixaba plant, neither initially nor during the board approval process.
The process also determines that the The unit is kept in complete working order with investments for at least seven years.
Will Garuto receive new investments in Espiritu Santo?
Yes. In addition to working for at least another seven years, the Nestlé has already said that it will make new investments in the unit From Vila Velha.
In recent years, the factory has undergone modernization, and in May 2023, the company announced the release An investment of R$430 million to expand the capacity of the unit.
Work on modernizing the unit, installing new production lines and expanding the product range will begin in the coming weeks and will be completed next year.
Will the singing of love ever end?
no. Cade and Nestlé even signed an agreement, in 2017, that provides for the sale of a package of ten brands such as Serenata de Amor, Chokito, Lollo and Sensação. The company, however, has not fulfilled its commitment Tags are not sold.
In Wednesday’s decision (7), the council did not place restrictions on this topic. With this, the continuity of these traditional corporate brands has been preserved.
Will Garoto create new products in the ES factory?
Yes. In addition to maintaining existing products in its portfolio, such as the Serenata, the company is planning new products.
Among the innovations is the start of manufacturing a new line of chocolate bars in the Espírito Santo factory.
Wasn’t Garoto already purchased?
Yes. The purchase took place in February 2002, which is when Cade’s rulings were made after the companies closed negotiations. After two years, the board opposed the process, based on the claim that signing the contract would result in a concentration of more than 58% at that time.
The law that went into effect in 2012 changed the way KID is analyzed. Since then, it has become necessary to pre-analyze the concentration business in the country.
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