Brazil: Brasfrigo and Goias Verde to pay 3 million for Gun Jumping

Brazil’s competition agency, CADE, has declared that the companies Brasfrigo, Brasfrigo SA and Goias Verde will be fined with a total of 3 million BR, as punishment for ‘gun jumping’ the approval of their merger, which was yet to be given by the proper authorities. Goias Verde’s acquisition of Brasfrigo, the root of this case, involved the purchase of all of Brasfrigo’s production assets and brands, including canned vegetable brands Jurema, Jussara, Tomatino and Terrabela.

The violation was detected in late 2014, when the companies would have violated a pact to preserve the acquisition’s reversibility by failing to maintain all the acquired assets in an active and productive capacity. Commenting on the decision, Commissioner Ana Frazão said “the absence of notification has prematurely altered the competition outlook, bringing illegal benefits to the parties, especially to the buyer…”.

Goias Verde was found to be selling Brasfrigo brands on their own website, and even modifying the design of Jurema’s packaging. Goias Verde will be forbidden from selling this brand within Brazil for at least 2 years. Despite the similarities between the companies, the merger was likely to be approved without much discussion due to the minimal level of market concentration it would entail, as well as a number of other competitors in the market.

Full content: CADE

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.