Brazil’s antitrust regulator, CADE, has ruled that Swiss food giant Nestlé must divest its Garoto chocolate unit in order to satisfy competition concerns.
In a five to one majority ruling, the regulator said the combination of Nestlé and Garoto would result in a “high degree of market concentration”, reported the Associated Press.
Nestlé bought Garoto, one of Brazil’s largest chocolate companies, in February 2002 for around US$250m.
After CADE’s ruling, Nestlé said it was considering its options.
“This process is not over,” Ivan Zurita, the head of Nestlé’s operations in Brazil, was quoted by AP as saying.
In a statement, Nestlé said, “We are surprised and perplexed by the radical position taken by a majority of the members of the Antitrust Agency.”