Indecopi denied the Gloria Group’s acquisition of Agrícola del Chira SA

Indecopi’s Commission for the Defense of Free Competition denied authorization for the acquisition of Agrícola del Chira SA by Agroaurora SAC, a company that is part of the Gloria Group, after verifying that said concentration operation would generate a significant restriction of competition in two markets linked to the sugar industry in Peru, and that the measures proposed by the aforementioned group would not mitigate the possible effects that could arise from the operation.

“After evaluating the first phase of the procedure, the Commission identified serious concerns regarding possible significant restrictive effects on competition in two markets in which the companies involved participate: the market for the acquisition of sugar cane from independent sugar cane growers in the regions of Piura, Lambayeque and La Libertad; and the market for the commercialization of domestic sugar in Peru. Therefore, it initiated the second phase to deepen its analysis and, after an exhaustive investigation, the risks identified in both markets were confirmed,” Indecopi said in a statement.

A resolution of June 27, 2024 (148-2024/CLC-INDECOPI) specifies that the greatest risk to competition in the sugar cane acquisition market would occur in the Lambayeque region because The Gloria Group would have more than 80% of market share; while, in the domestic sugar marketing market in the wholesale channel at the national levelIf the transaction had been completed, the Gloria Group could have more than 50% stake.

According to Indecopi, it was also verified that some of the brands of the Gloria Group (such as Agrolmos and Dulce Norte) would be close to the brand of sugar marketed by Agrícola del Chira SA (Caña Brava) in terms of prices and characteristics, which would increase the probability that the aforementioned operation would restrict competition. Even more so in the Piura region, where the presence of other brands of local or imported sugar is quite limited.

This is the first operation whose authorization has been denied by the Indecopi Commission for the Defense of Free Competitionwithin the framework of the prior control regime for business concentration operations in force since June 14, 2021.

According to Law 31112, which establishes the Prior Control of Business Concentration Operationsl, Indecopi is responsible for reviewing transactions that occur in any of the country’s economic sectors and that exceed the thresholds determined in the aforementioned law, with the aim of ensuring that business concentration operations are carried out respecting effective competition and promoting economic efficiency for the well-being of consumers.