Garoto now belongs to Nestlé: is the factory in danger of closing?

According to the information provided, the acquisition of Chocolates Garoto by Nestlé was completed after approval by the Administrative Council for Economic Defense (Cade). The conclusion took place last Wednesday, 7.

However, this approval was conditioned to the implementation of “behavioral remedies” by Nestlé, aiming to preserve fair competition in the national market of chocolates.

So-called “behavioral remedies” are the provisions associated with the internal workings of the company – for example, duties and prohibitions. That is, they are the conditions imposed by the approval of the acquisition of Garoto by Nestlé.

Nestlé acquired Chocolates Garoto in February 2002, but the operation was vetoed by Cade two years later, in 2004. The Board considered that the acquisition would result in a concentration of more than 58% of the national chocolate market, which could harm competition.

One of the determined behavioral remedies is the obligation to keep the Garoto factory in Vila Velha, Espírito Santo, in operation for the next seven years, at least.

Even Nestlé has expressed its commitment to carry out new investments at the capixaba unit, thus strengthening the factory's operation.

Nestlé announced major investment in the Espírito Santo factory

The recent modernization and the announced investment of BRL 430 million to expand the unit's capacity demonstrate the company's commitment to strengthening and expanding its activities at the site.

These measures are imposed to ensure that the acquisition does not cause damage to competition in the sector and that the purchasing company assumes commitments to protect the market and consumers.

Nestlé was committed to selling a package of ten brands of chocolates, including Serenata de Amor, Chokito, Lollo and Sensação, as part of the agreement with Cade.

So far, it is expected that the sale of traditional bonbons will continue happening by Garoto instead of being manufactured by Nestlé.

So far, there is no information about any move by Nestlé to sell these brands of bonbons. Therefore, the continuity of marks traditions was guaranteed, at least, for the coming years and the modernization of the site was also confirmed.

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