Swiss food giant Nestlé has had a further disappointment in Brazil, where antitrust authorities have rejected the company’s appeal for a stay of execution on the sale of its local chocolate subsidiary Garoto.

Nestlé bought Garoto two years ago for US$230m, but authorities have decided the deal poses a threat to fair competition and ordered that Nestlé divest Garoto. Opponents of the ruling had used the potential unemployment issue as an argument for why the acquisition should be allowed to stand, but given that several potential buyers have emerged, this argument has not been granted great credence.

The federal prosecutor had asked the antitrust authorities to relieve the council member heading the case against Nestlé of his duties, alleging he was biased against the Swiss company, but the authorities rejected this assertion. The authorities have still to review an independent request by Nestlé that it examine new facts and revisit the case.

Cadbury Schweppes of the UK is reported to be among these potential buyers, according to Reuters.

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