Profile

The soft drinks sector plays an important role in the economy of the country. Among some interesting numbers, considering only the year 2015, the sector employed directly more than 60 thousand people and produced 14.903 billion liters. This amount created an income of R$ 23.5 billion (reais), making Brazil the second country on soft drinks consume, only behind the United States of America.

Market Competition Legislation

In 2012 a new Competition Law (Law 12.529/2011) came into effect. Some points in the legislation generate strong concerns among small regional companies, especially regarding the withdrawal of the practice of “exclusivity requirement” from the list of infractions to the economic order.

It is possible to perceive a strong liberal tendency in the decisions of the antitrust actions. Afrebras disapproves its performance. From the point of view of the small regional companies, it is impossible to compete in a hostile environment in which the abuses of large monopoly capital are not monitored, and far away from being controlled.

Market Concentration

The beverage industry in general has similar competitive characteristics in Brazil: very few dominant companies try to prevent competition for their products. They use strategies to make it impossible for small manufacturers to expand their range area.

Some examples are maintaining exclusivity at the points of sale, buying spaces in the market shelves, prices outside the reality of the market and aggressive marketing. In addition, they generally have government support, which is given through various tax incentives, which deteriorates the competitive environment.