Brazilian lawmakers and competitors are urging antitrust regulators to block or heavily condition the merger between pet retail giants Petz and Cobasi, warning it could lead to monopolization and higher consumer costs.
At a public hearing convened by Brazil’s competition authority CADE, critics — including rival company Petlove, members of Congress, and representatives from the Ministry of the Environment — voiced strong opposition to the proposed merger of Petz and Cobasi, the two largest players in Brazil’s pet retail sector. The deal, they argued, would severely limit market competition and concentrate excessive power in a single entity.
Petlove’s representative, Carlos Ragazzo — a former CADE councilor — warned that no company, regardless of size, would be able to compete with the new entity.
“The objective of this merger can be nothing other than to increase prices, reduce variety, and worsen the consumer experience to boost profitability,”
he said. Ragazzo added that the pet market is already showing signs of consolidation and rising prices, and this merger could accelerate that trend.
Despite these concerns, CADE’s Superintendence gave its unconditional approval to the merger in June. However, Petlove filed an appeal, placing the deal under extended review by CADE’s Tribunal, which has now been deliberating for more than four months. A final ruling is expected by the end of 2025. Due to the case's complexity, lead councilor José Levi Amaral de Mello Júnior has requested an additional 90 days to make a final decision.
In response to the backlash, Petz and Cobasi sent their CEOs — Sérgio Zimerman and Paulo Nassar — to defend the merger, after being previously criticized for missing a congressional hearing. They argued that the consolidation would enhance competitiveness in a fragmented market increasingly dominated by international e-commerce platforms like Amazon and Mercado Livre.
“We need to correct our course and regain our competitive edge,”
said Zimerman. Nassar added that the merger would allow for operational efficiencies, ultimately lowering prices and improving service for consumers.
Nevertheless, lawmakers such as Gisela Simona (União Brasil–MT) and Talíria Petrone (PSOL–RJ) insisted that, if the deal is approved, it must come with structural and behavioral remedies. Simona cautioned that the merger could drive up the cost of pet care, potentially leading to higher abandonment rates.
“CADE must uphold the principle of prevention and ensure that millions of consumers are not harmed,”
she said.
Petrone went further, warning that the combined company would effectively create a monopoly, undermining both competition and animal welfare.
“A monopoly does not protect. Concentrating power in one dominant player won’t lead to better outcomes for animals or for Brazilian families,”
she said.
Vanessa Negrini, speaking for the Ministry of Environment, echoed these concerns, emphasizing that the rise of a market powerhouse could disproportionately hurt socially vulnerable populations by pricing out small and mid-sized competitors.
Although some animal advocacy groups applauded Petz and Cobasi’s work in pet adoption and rescue, many avoided commenting directly on the merger — prompting CADE’s lead councilor to remind attendees that the hearing’s focus was market competition.
Brazil’s pet market generated 77.3 billion reais ($14.5 billion) in 2024, making it the world’s third largest behind the United States and China, with around 169 million pets in the country. If approved, the Petz-Cobasi merger would create an entity with estimated annual revenues of over 7 billion reais ($1.3 billion).
Source: MLex
