According to the Superintendency of Economic Competition (SCE), the transaction could potentially affect the condensed milk market.
Although Nestlé Ecuador and the Peruvian conglomerate Gloria Foods confirmed in recent days that the acquisition process of Nestlé's dairy and juice business in the country, operated by Ecuajugos, had been completed favorably and that Gloria Foods assumed the operation as of January 1, 2025, the First Instance Resolution Commission of the Superintendency of Economic Competition (SCE) decided to subordinate the authorization of the operation to the fulfillment of a series of binding conditions.
The entity announced its decision on Wednesday, January 22, 2025, although its ruling was issued on December 13, 2024.
'Potential impact on the condensed milk market was detected'
According to the Superintendency, during the investigation it detected that the transaction could generate unilateral risks, by identifying a potential impact on the condensed milk market, which could lead to harm to consumers.
"The resolution aims to ensure a fair competitive environment, prevent adverse effects on the market and protect consumer rights," the regulator said.
The conditions imposed include:
- Maintaining competitive conditions in prices and profit margins.
- Restriction to reduce imports of condensed milk.
- Implementation of a compliance program.
- Temporary licensing of the “Gloria” brand to ensure equal market access.
- Creation of a trust to promote competition through advertising campaigns, with the aim of supporting new economic operators in the condensed milk market
In March 2024, Nestlé reached an agreement with Grupo Gloria for the sale of its dairy and juice business in Ecuador operated by Ecuajugos S.A. This transaction consisted of the sale of the local brands La Vaquita, Yogu Yogu, Natura, Cereavena and Huesitos, a factory and distribution center located in Cayambe, as well as the licensing of the La Lechera and Svelty brands, Nestlé said.
The resolution indicates that these conditions, which the Superintendency describes as "remedies," must be maintained for five years from the closing of the operation, during which time Gloria will maintain the license for the La Lechera brand.
The document also states that "failure to comply with this condition by Gloria Foods will result in the economic concentration between Gloria and Ecuajugos being voided."
Grupo Gloria entered the Ecuadorian market in 2005 by purchasing a portion of the shares of Lechera Andina SA, marking the beginning of its presence in the country. In 2022, Grupo Gloria acquired Soprole, one of the main dairy companies in Chile, according to information on its website. Grupo Gloria has businesses in Peru, Bolivia, Colombia, Ecuador, Argentina, Puerto Rico and Chile.
