Ambev sells Do Bem juice brand to Brazilian Tial

Amount has not been disclosed; deal pending approval by antitrust regulator

01/07/2025

Ambev has decided to sell its juice brand Do Bem, acquired in 2016, to the Brazilian company Tial. According to Ambev, the agreement has been signed and is pending approval from the antitrust watchdog CADE. The amount involved in the deal has not been disclosed. It includes selling intellectual property rights and formula copies of Do Bem, which will continue to be marketed by Tial. Columnist Lauro Jardim from newspaper O Globo initially reported the news.

When acquired in 2016, the acquisition of Do Bem was part of Ambev’s strategy to expand its non-alcoholic beverage division. The company now says the sale will allow it to prioritize investments in other brands and business segments. “Over the past eight years, Do Bem has experienced significant innovations, reached more regions in Brazil, and expanded its presence to new points of sales,” Ambev noted in a statement. In the third quarter of 2024, the non-alcoholic beverage division represented 8.8% of Ambev’s total revenue.

One of Do Bem’s main competitors is Coca-Cola’s Del Valle. However, the sector is characterized by a variety of strong regional brands.

Tial, founded in 1986 in Visconde do Rio Branco (Minas Gerais), describes itself as a producer of ready-to-drink fruit-based beverages made with natural ingredients and no chemical additives. The company has an annual production capacity of 96 million liters. Currently, it offers 51 products, including nectars, 100% juices, other fruit-based beverages, and coconut water. In addition to domestic sales, the group exports to countries such as the United States, Japan, and Portugal.

Tial is owned by the food manufacturing group Pif Paf (through the holding company CRL Empreendimentos) and the investment fund Victoria Falls, which invests in various sectors such as mining, healthy foods, and administrative support services. The companies declined to comment on the deal.

Pif Paf considered going public in 2021 but now faces a complex financial situation, advancing with asset sales to reduce its leverage. The company has hired G5 Partners to develop a plan focused on debt reduction.

The request submitted by the companies to CADE requires that the deal be reviewed under a fast-track process, which applies to deals with minimal competitive harm and market concentration below 20%. In the filing submitted to the antitrust regulator, the companies indicated that the combined market share of the buyer and the target business “in all presented market scenarios was significantly below the 20% threshold,” based on data from Scanntech.

In markets such as coconut water, non-carbonated non-alcoholic beverages (like sodas), and ready-to-drink juices, the consolidated business holds a market share of less than 10%. According to the company, the low market share demonstrates that the concentration resulting from the deal would be “minimal and unlikely to raise competitive concerns.”

Zeca Berardo, a competition law expert and partner at Berardo Advogados, said the process is expected to proceed smoothly at the antitrust regulator. “It’s a major player in the beverage sector divesting a business line to a relatively small player. That should not raise any competition concerns,” he said, noting that other significant competitors in the sector, like Coca-Cola, continue to invest.

According to Mr. Berardo, CADE has taken less than 20 days to study cases like that. A third party can oppose the deal within 15 days, or for a council member to request a detailed review of the case—both scenarios are deemed unlikely by the expert.

By Cristian Favaro  e Ana Luiza de Carvalho  — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Brazil’s trade surplus declines, uncertainty looms over 2025 outlook

Despite a 24.6% drop, 2024 posts second-best performance; exchange rate and U.S.-China tensions add to doubts

01/07/2025

Brazil’s trade surplus for 2024 reached $74.55 billion, a 24.6% drop from the record-breaking $98.9 billion in 2023. Despite the decline, 2024 still secured the second-highest trade surplus since official records began, in 1997, according to the Ministry of Development, Industry, Trade, and Services (MDIC). Looking ahead to 2025, experts foresee a surplus comparable to or slightly better than 2024, though still significantly below the peak achieved in 2023.

According to the Ministry’s Foreign Trade Secretariat (SECEX), 2024 saw $337 billion in exports and $262.48 billion in imports. Declining commodity prices and a rise in imports contributed to the smaller surplus.

For 2025, a slower domestic economy is expected to curb imports, while an anticipated strong agricultural harvest could boost exports. However, uncertainty persists regarding export prices, exchange rate, and the impact of renewed U.S.-China trade tensions, especially as President Donald Trump assumes office on January 20.

“Given the expected good harvest, the surplus should remain at 2024 levels or potentially reach $80 billion if the domestic slowdown materializes,” said Lucas Barbosa, an economist at AZ Quest. He projects imports will stabilize near the 2024 level of $262 billion, while exports could rise to $350 billion.

Similarly, Gabriela Faria, an economist at Tendências Consultoria, forecasts a $77.6 billion surplus for 2025. She expects a 1.6% drop in export values due to declining prices but notes potential gains in volume, particularly from minerals, oil, and grains. Domestic grain production is projected to grow 8.2% over the 2023/24 cycle, with soybeans poised to reach record levels, according to estimates from Brazil’s National Supply Company (CONAB).

On the import side, Tendências projects a 3.1% decline in 2025 due to weaker domestic activity. Tightened financial conditions, increased internal uncertainties, slower global growth, and reduced fiscal stimulus form the basis for Tendências’s GDP growth estimate of 1.9% for this year, down from 3.4% in 2024, according to Ms. Faria.

Mr. Barbosa of AZ Quest cautioned that the exchange rate remains a significant challenge. “A dollar trading above R$6 favors exports, especially of goods that might otherwise be consumed domestically. For example, animal protein becomes increasingly attractive for export,” he said.

Herlon Brandão, director of foreign trade statistics at the MDIC, anticipates imports in 2025 will remain at or exceed 2024 levels, supported by Brazil’s projected economic growth. He also noted that there are no significant indications of large commodity price fluctuations.

On the export side, Mr. Brandão expects global economic growth to increase demand for Brazilian goods, particularly food products like soybeans and meat. “As the agricultural harvest recovers”, he said, soybeans should reclaim their position as the top export product, replacing oil. SECEX forecasts a trade surplus for 2025 ranging from $60 billion to $80 billion.

Industry concerns

The wide range in SECEX’s projections reflects the unpredictable nature of 2025, said José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB). His preliminary estimate points to a $93 billion surplus, assuming moderate price increases and volume growth. Commodity prices, he said, are sensitive and can react to any external events. “AEB’s projections come with many caveats,” he noted. Mr. Castro also highlighted uncertainties surrounding U.S.-China trade relations and their potential impact on global markets, alongside concerns about the exchange rate.

Tatiana Prazeres, foreign trade secretary at the MDIC, described 2024’s trade performance as positive, highlighting the “sustained high level of exports.” The decline in export value, she said, resulted from lower product prices, despite a 3% increase in export volumes. SECEX data showed a 0.8% drop in export value for 2024, driven by a 3.6% fall in prices.

Mr. Barbosa of AZ Quest highlighted notable export products in 2024, including beef, pork, sugar, molasses, and coffee. While many of these goods suffered price declines, increased export volumes more than offset the impact.

Welber Barral, a partner at BMJ consulting, noted that the price drop in 2024 was primarily driven by commodities. “Imports, particularly capital goods, increased—a positive sign. Although the surplus fell by nearly 25%, it’s still impressive given Brazil’s historical performance. “A similar pattern could emerge in 2025, with imports expected to continue rising despite the strong dollar,” he said, citing anticipated GDP growth of around 2% even amid an economic slowdown.

Mr. Barbosa of AZ Quest added that 2024’s trade surplus aligned with initial expectations, but the resilience of imports was surprising. SECEX data showed import volumes grew 17.2% in 2024, while prices declined by 7.4%. “The volume data reflects robust domestic demand, which continues to flow outward via imports, particularly of capital goods and consumer goods,” he explained.

Capital goods imports were particularly strong, aided by lower prices, Mr. Castro of AEB noted. Government data showed that capital goods imports rose 20.6% in value in 2024, driven by a 25.6% increase in volume and a 4.7% price decline.

*By Estevão Taiar  e Marta Watanabe  — Brasília, São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Brazilian reserves lost $33.3bn in December with Central Bank auctions

Monetary authority sold $21.574bn in the spot market and $11bn in line auctions

01/06/2025

Currency interventions conducted by Brazil’s Central Bank in December decreased international reserves by $33.3 billion in one month, bringing the total to $329.7 billion by the end of 2024. At the end of November, the reserves level was $363 billion. Despite this decline, experts say the volume is still comfortable.

The level reached at the end of last year is lower than the $355 billion recorded at the end of 2023 but higher than the $324.7 billion in 2022. These are nominal values. Silvio Campos Neto, senior economist and partner at Tendências Consultoria, described December’s drop as “significant,” noting that reserves remain healthy. However, he cautioned that the rapid decline is a warning for the coming months.

“There was a strong intervention in the foreign exchange market in December, and it was not enough to reverse the pressure, indicating that the source of this movement is not entirely related to market dysfunction or a temporary dollar scarcity; it is more structurally linked to increased risk perception about Brazil,” he explained.

In December, the monetary authority held nine spot dollar auctions and five “line” auctions (with a repurchase agreement), totaling $32.574 billion. That included $21.574 billion in spot sales and $11 billion in line auctions. Looking at the volume of reserves, Danilo Igliori, chief economist at Nomad, also emphasized the level is comfortable. He noted that concerns could arise if the crisis seen in December escalates in 2025. “I don’t think that’s the scenario. It was an evident moment of stress, and the Central Bank responded well.”

Silvio Campos Neto from Tendências explained that the interventions were the main reason for the reserve reduction but also highlighted the impact of rising market interest rates in the United States. “That also affects the value as it reduces prices, especially U.S. bonds, which make up most of the reserves.”

The Central Bank stated that there is no consensus on the best metric to define the “optimal level” of reserves but indicated that periodic internal evaluations show Brazil is aligned with practices of similar countries.

In a press conference on December 19, the then-Central Bank president, Roberto Campos Neto, said the monetary authority was operating in the foreign exchange market as usual. He pointed out that the monetary authority intervenes whenever it perceives market dysfunction. Mr. Campos Neto also noted an unusually large flow at the end of 2024, with an above-average outflow of dividends as one of the reasons.

Fiscal concerns also influenced the exchange rate’s movement. At the end of November, the government announced measures that were poorly received by the market. The package was unveiled alongside a proposal to exempt those earning up to R$5,000 from income tax, which raised concerns and impacted interest rates and the exchange rate.

The National Congress approved the fiscal project in December, while the income tax proposal has yet to be submitted by the government to Parliament. The real continued to decline, closing 2024 with a 27.3% depreciation, at R$6.18 to the dollar.

Mr. Igliori from Nomad pointed out that December typically sees a higher dollar outflow, but the scale of the reserve drop is linked to stress regarding fiscal policy. “The auctions were significant, and yet the exchange rate moved considerably. It became clear that during December, we experienced a mini credibility crisis, and the impact on reserves was a consequence of the Central Bank’s management during this period through auctions,” he said.

Another factor in the end-of-year scenario was the tone of criticism from Workers’ Party’s (PT) members regarding the monetary authority’s actions. On the same day as Mr. Campos Neto’s press conference, PT President Gleisi Hoffmann posted on social media that the real’s depreciation in those weeks was a “speculative attack.”

In the press conference, the then director of monetary policy and current Central Bank president, Gabriel Galípolo, was asked about that possibility. He argued that the idea of a “coordinated speculative attack” did not represent market movements. Mr. Galípolo stated that “it’s not correct” to treat the market as a “monolithic block.”

The chief economist at Nomad said there is always pressure on the monetary authority and no reason to believe the new leadership will act unprofessionally. “I don’t see an inclination to introduce significant institutional uncertainty around the Central Bank’s autonomy, which has been hard-won.”

*By Gabriel Sinohara

Source: Valor International

https://valorinternational.globo.com/
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Foreign investors record largest stock market outflow since 2020

Institutional investors follow suit, ending the year with net withdrawals on the secondary market

01/06/2025

The turbulence triggered by the government’s unveiling of weaker-than-expected fiscal measures, anticipation of aggressive protectionist policies from Donald Trump, and rising Selic rates kept foreign investors at bay from Brazil’s stock market throughout 2024.

Data from B3, the Brazilian stock exchange, reveals that foreign investors pulled R$32.1 billion from the secondary market (trading of already-listed shares) last year. This marked the largest annual outflow since 2020, the first year of the pandemic, when the segment saw a R$40.1 billion deficit, according to a Valor Data analysis. The figures exclude IPOs and public offerings.

Institutional investors also ended 2024 with net withdrawals, recording a R$37.5 billion deficit in the secondary market. By contrast, only individual investors finished the year with a positive balance, contributing R$30.8 billion.

Michel Frankfurt, head of Scotiabank’s brokerage in Brazil, casts doubt on the prospect of significant foreign inflows in the near term. “We won’t see substantial flows. There might be some activity to capitalize on stock market bargains, but we lack a strong ‘narrative’ to create momentum. It’ll just be a ripple,” he explained.

Mr. Frankfurt added that Brazil appears to have been “abandoned” by global investors, hindered by its failure to differentiate itself on the global stage and internal woes like worsening government accounts and disappointment over the spending cut package.

HSBC analysts echoed this sentiment, expressing concern over the vicious cycle stemming from fiscal policy frustrations. Last week, they downgraded their recommendation for Brazilian equities from neutral to “underweight,” citing growing pessimism about the country’s outlook.

“Brazil fits the profile of a ‘classic value trap,’” wrote analysts Alastair Pinder, Nicole Inui, and Herald van der Linde in their report.

While acknowledging that Brazilian equities are currently undervalued—trading at a projected 12-month price-to-earnings ratio of 6.6 times—they argue that asset revaluation is “unlikely” until the Selic benchmark interest rate falls or fixed-income returns decrease, a shift they do not anticipate before the second half of 2025.

*By Bruno Furlani

Source: Valor International

https://valorinternational.globo.com/
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