BRF will launch a discount brand in the Brazilian market, after restrictions imposed by the country’s anti-trust authority were lifted.
As part of the merger between meat processors Perdigão and Sadia, which created BRF, Brazil’s Administrative Council for Economic Defense (Cade) ordered the company to suspend its activity in some product categories for up to five years. Packaged and processed foods including pizzas, lasagne, meatballs and sandwich products were among those to receive the heaviest restrictions, with BRF not allowed to launch replacement brands for the entirety of the suspension.
The last of the restrictions expired in July, paving the way for BRF to compete in the categories in Brazil once again.
In a call with investors, BRF said the discount brand would be targeted at a growing number of ‘cost-conscious’ consumers, who account for around 30% of Brazil’s processed food market. It did not reveal which products would be included in the new range.
“The new brand will increase use of our installed capacity and will allow the use of leftover raw materials,” said BRF chairman Abilio Daniz.
BRF did not give details of what the new brand will be called, but said it would start marketing it to consumers by the first quarter of next year.
It comes after the company announced relatively strong second-quarter results, improving on both its top and bottom lines from the first quarter but losing ground year-on-year in the wake of Brazil’s so-called carne fraca scandal. Revenue was BRL 8 billion ($2.52 billion) – up 2.4% on the first quarter, but down 6% on the same period last year – while EBITDA of BRL 575 million ($181 million) was 13.6% higher than the first three months of the year but nearly 40% lower than the second quarter of 2016.
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