January 21, 2019 / 6:21 PM / 4 months ago

Brazil Carnival's beer contracts probed for competition violations

BRASILIA/SAO PAULO (Reuters) - Brazil’s annual Carnival street parties are being probed for awarding exclusive contracts to certain breweries, possibly limiting competition and driving up revelers’ beer tabs, anti-trust agency Cade said on Monday.

A Finance Ministry report last year named Ambev SA, Latin America’s largest brewer, and Heineken NV’s Amstel among the companies that have made deals with city governments to supply beer at Carnival.

The ministry said in November that the exclusivity agreements could hurt consumers by limiting competition and asked Cade to investigate further.

Cade has requested that a long list of cities, including Rio de Janeiro, report back on their procedures for awarding such deals by Friday, newspaper O Estado de S.Paulo reported.

Ambev, saying that it was not a target of the investigation itself, added in a statement that its Carnival sponsorship deals with cities were always done “in accordance with the relevant legislation and taking into account the public interest at these events.”

Heineken said in a statement that it repudiates “any practice that could violate the rules governing the right to free competition.”

Carnival is Brazil’s largest annual celebration in which millions take to the streets for parades and other public parties over several days, generally in February and March.

Reporting by Jake Spring and Gabriela Mello; Editing by Marguerita Choy

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