Commission investigates Brazilian orange juice tie-up

By Guy Montague-Jones

- Last updated on GMT

Related tags: Orange juice, European union

Citrovita and Citrosuco together are responsible for 25 per cent of all orange juice produced globally
Citrovita and Citrosuco together are responsible for 25 per cent of all orange juice produced globally
The Commission has launched an investigation into a proposed tie-up between two Brazilian orange juice makers because of implications for competition in Europe.

Under the merger plans, Citrovita and Citrosuco, owned by the Votorantim Group and the Fischer Group respectively, will be combined to create a single orange juice processor.

Strong market position

The two juice makers are some of the largest in the world and together process more than 40 per cent of the orange juice coming out of Brazil and have joint net annual revenue of $1.2bn.

Votorantim and Fischer, which will each have a 50 per cent share in the new group, said it will be responsible for 25 per cent of all orange juice produced worldwide.

It is this market position and power that has alerted the competition authorities at the Commission.

Joaquín Almunia, Commission Vice President in charge of competition policy, said: “Orange juice is a familiar part of many European consumers’ diet but they are probably unaware that most of the orange juice consumed in the European Economic Area (EEA) comes from Brazil.

“The proposed joint venture would combine two of the four main suppliers of orange juice to Europe and we need to make sure that European consumers will not be adversely affected.”

Areas of investigation

The investigation, which will run until 19 May, will look into the impact of the merger on competition for orange juice and various by-products from juice processing.

From its initial investigation, the Commission found significant overlap between the activities of Citrovita and Citrosuco in the EEA. Both supply juice at the wholesale level that is then sold to EU consumers by different brands and retailers.

The Commission added that the proposed joint venture would also have a strong position in the market for by-products from orange juice processing, such as orange oils and essences.

Apart from their involvement in the orange juice market, Votorantim and Fischer have significant operations in a diverse range of sectors. Votorantim is involved in cement, concrete, mining and metallurgy and Fischer provides maritime services for petroleum platforms.

Related topics: Markets, Juice Drinks

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