Camil Alimentos S.A. has announced it is no longer buying the pet food business of Chilean producer Empresas Iansa. In a recent press release, Camil provided no reasons for its decision.
Two years ago, Empresas Iansa had announced the sale of its pet food business to Brazilian group Camil for US$48 million to focus on the sugar industry, its core business.
Why did Camil cancel the pet food acquisition?
According to Valor International Business, after the purchase announcement in 2020, Iansa’s pet food division suffered a significant market share loss due to “a defective preservative causing intestinal problems and even death of pets.”
The same publication, quoting Flávio Vargas, head of investor relations of Camil, states that as Camil did not know the size of the damage to Iansa’s business, they agreed to postpone the deal. Furthermore, although Iansa reformulated the product formulation and processes, the company is still in the middle of the road with just 4% of the market share, compared to a 10% market share owned at the time of the deal.
Damage control strategy insufficient?
In December 2020, Iansa wrote a statement on its Alimentos Cannes Facebook site, apologizing for the unfortunate events affecting a few pet food lots. In addition, the company announced a new certification called DICTUC issued by the Pontificia Universidad Católica de Chile to guarantee its products.
It is uncertain how much the problems arising from the allegedly defective preservative affected Iansa’s pet food business. Yet the cancellation of the purchase by Camil may indicate the size of the damage to Iansa’s market share in Chile.
Iansa had been among top five pet food manufacturers and sellers in Chile, just after Nestlé Purina Chile S.A., Empresas Carozzi S.A. and Champion S.A. The company competes with a few brands such as Cannes, Charly, Felinnes and Minninos, plus does some pet food manufacturing for third parties.
