Sorry Glenn Greenwald, But You're Wrong About Brazil

This article was first posted on HubPages on August 30, 2016. It is being republished with the full permission of the author.

Strangest Coup Ever

While many Americans likely have a cursory understanding of the political happenings in Brazil, it is important to make sure that the American public has a complete picture of what is going on. Unfortunately, many, such as CNN, have basically used only one source for the impeachment trials in the South American government. That source. Glenn Greenwald.

Now, I would like to preface this article by showing my utmost respect for Mr. Greenwald as an investigative reporter. His work on Edward Snowden and the uncovering of the NSA spy program was a great service to our country and he should be commended.

Unlike his work on the NSA program, Mr. Greenwald has allowed his personal relationships and political leanings cloud his viewpoint on what is happening in Brazil.

As an American living in Brazil - Greenwald is also an American living in Brazil - I think it is my duty to clarify many of the misleading comments and assumptions Mr. Greenwald has made about the political situation. Let's use the interview he gave to Amy Goodman at Democracy Now! to start the conversation.

Mr. Greenwald's first response starts with him explaining how Dilma Rousseff, Brazil's currently suspended president, was arriving at the Senate to give a final 30 minute plea and to answer questions from senators. This is precisely the problem when Mr. Greenwald and others have described what is going on in Brazil as a golpe or coup. This loaded word, especially when considering Latin American history, gives listeners and readers the impression of a military takeover or undemocratic force of power in order to remove Rousseff. Yet, how can it be that Rousseff is a victim of a coup if she has been afforded all the legal provisions including the aforementioned 30 minute speech and the question and answer session?

Is it possible that Brazil does not know how to successfully stage an actual coup? Recent history of a military dictatorship would suggest otherwise.

Below are some examples of the other legal provisions Ms. Rousseff was afforded since accusations of fiscal fraud were brought upon her.

• The question and answer session includes senators of all parties including Ms. Rousseff's own Partido de Trabalhadores, or PT, and parties that have aligned in favor of Ms. Rousseff including, the Communist Party of Brazil and the Party of Socialism and Liberty.
• The sessions of the House of Representatives (Camara de Deputados) and Senate to impeach Ms. Rousseff were shown live on Brazil's largest TV station, Globo, and not done in secrecy. All members, including congressmen and congresswomen against impeachment, were allowed to publicly speak.
• Ms. Rousseff has used the services, even while suspended, of the government's attorney general, Jose Cardozo. Mr. Cardozo has been responsible for Ms. Rousseff's defense before and after her suspension.
• Ms. Rousseff has been afforded all benefits of her presidency during her suspension including a monthly food budget, housing, etc. Before her suspension Ms. Rousseff spent approximately R$62 thousand reais (approx. $21 thousand dollars) per month in food, while her country is experiencing one of its worst economic crises in history.

Furthermore, Ms. Rousseff was provided with all the benefits and provisions outlined in the country's most recent constitution written in 1988 following a military dictatorship. Moreover, the nation's supreme court, which has played the important role of checking and balancing the executive and legislative branch, is mostly made up of appointees from Ms. Rousseff's ruling party. Of the 11 supreme court justices 3 were appointed by Ms. Rousseff's predesccor, Luiz Inacio Lula da Silva, while 5 were appointed by Rousseff herself. Currently, the head of the supreme court and the justice presiding over the question and answer sessions, Ricardo Lewandowski, was appointed by Lula.

As a party that started on the outside fighting for the working class, PT likes to constantly give the impression that they are victims, while after 13 years they had consolidated power in each branch of the government.

Don't Believe Ms. Rousseff is Victim of a Coup

Half Truths, Lies and Misinformation

In his first response, Mr. Greenwald gives the impression that Ms. Rousseff is being brave by giving this 30 minute speech, a speech whichshe doesn't have to give. Of course, this ignores the obvious fact that Ms. Rousseff, rightfully so, wants to defend her legacy as she is likely to be removed from office on Saturday. Again, where in an actual coup does the leader get to officially defend themselves?

Mr. Greenwald also fails to tell the audience that Ms. Rousseff is currently a subject of a documentary that is expected to show her in a positive light, and that her defense would make great footage for the film.

Ms. Rousseff won the 2010 with no political experience. Her previous role was that of Minister of Mines and Energy. Ms. Rouseff headed this department, while the Petrobras bribery scandal was taking place. Ms. Rousseff claims ignorance as she does with the current charge, which makes one wonder whether or not she is unfit for her dishonesty or incompetence.

Next, Mr. Greenwald goes on to say this about the interim president, Michel Temer:

"And it’s really quite a remarkable contrast with her former vice president, now the interim president, who’s about to become the country’s unelected president, Michel Temer. During the Olympics, Mr. Temer broke protocol by demanding that his name not be announced at the opening ceremony, because he was scared of being booed by the crowd. That’s how unpopular and hated he is. And yet, when the crowd actually saw him, even without his being announced, they did boo him, quite viciously. And then he hid during the closing ceremony by skipping that. And while he’s hiding, Dilma, who, of course, has a history as a fighter against this country’s former military dictatorship, who went to prison over that, who endured years of torture while imprisoned as a political prisoner, chooses to go and confront her accusers face to face and will give what, by all accounts, will likely be a very strong and aggressive and defiant speech consistent with her character and her political persona."

Let's start with the Olympics. Ms. Rousseff decided of her own accord - again, not a coup - to not participate in the Olympic Games in Rio de Janeiro, because she didn't want to be seen in a secondary (below Mr. Temer) position. Here. Mr. Greenwald, who is a former lawyer and should know better, does not disclose two pieces of information. First, the International Olympics Committee discourages political speech during the games regardless of the political party in power. In Rio, an Iranian woman was asked to leave after protesting the Persian country's treatment of women. As a host of the games, Brazil must abide by this provision. Secondly, just before leaving office in May, Ms. Rousseff herself signed a law prohibiting political speech at sporting events. Ms. Rousseff was regularly booed at World Cup matches in 2014 prior to her reelection.

Bringing the first World Cup since 1950 and the first ever Olympics Games to South America was a crowning achievement of Lula, Rousseff and PT. One wouldn't get that impression if they watched leftist protests or listened to Mr. Greenwald.

Mr. Greenwald is also disingenuous when he claims that Mr. Temer was "unelected." This gives the impression to outsiders that Mr. Temer and his party simply took over, which would qualify as a coup. However, Mr. Temer of the political party, PMDB, is Ms. Rousseff's vice-president! He has been so since 2011 when Rousseff took office for her first term. His succession follows the Brazilian constitution. Mr. Temer was elected just as much as Ms. Rousseff was. More on this later.

Mr. Greenwald gives the impression that Rousseff is popular and popular sovereignty is being usurped. He is correct in stating that Mr. Temer is unpopular in the country, but he fails to mention two important pieces of information; Mr. Temer's unpopularity is based on the fact that half of the country did not vote for the Rousseff/Temer ticket, and that Ms. Rousseff is even less popular than Mr. Temer. In fact, by July 2015 Rousseff's approval rating was 9%. Since then, it has stayed in the high single and low double digits. Mr. Temer has actually slightly higher approval ratings.

Furthermore, Rousseff's predecessor and mentor, Lula, also ran on a ticket with a vice-president - Jose Alencar of PRB - that was not of his own party in 2002 and 2006. Apparently, the issue of vice-president's of opposing parties is not an issue when it is convenient political maneuvering to win elections, but a big issue when it doesn't help one's cause.

Watching the coverage of the impeachment trial and the politics involved, I find it fascinating the left's attempts, especially when talking to those outside of the country, to frame the situation as if Rousseff is popular "among the people." Of course, that is simply not true and proven not only by data, but by the dismantling of her former political bloc. One of the problems with using populism as a political tool is that it only works when you're popular.

Read the rest of this article at Sorry Glenn Greenwald But You're Wrong About Brazil

Unemployment Approaches 12% in Brazil

According to the Institute of Geography and Statistics, the unemployment in Brazil in the quarter ending in July reached 11.6%. Based on IBGE numbers, the number of unemployed in the South American nation rose 37.4% compared to the same time period in 2015.

Another Brazilian files for unemployment benefits

The current rate of unemployment is the highest since 2012. In the first quarter of 2016 the unemployment rate was 11.2%, an increase of 3.8%.

In total, IBGE estimates that there are 11.8 million unemployed Brazilians. Of the 90.8 million workers that are employed, 34.3 million have signed workbooks. A signed workbook is used by the government to guarantee worker rights and benefits including, unemployment benefits.

With the increase in unemployment, the average worker's salary has also fallen. Currently, the average worker is making R$1,985 per month. Employers cannot legally lower employee salaries meaning new employees are being hired at lower rates. In relationship with the same time period in 2015, salaries dropped 3%. Average salaries remained stable compared to the previous quarter.

The number of people deciding to be self-employed, estimated at 22.6 million, rose 2.4% compared to 2015 and 1.5% compared to the first quarter.

Among the areas in which employers cut the most jobs, general industry fell 10.6%, and information technology, communication and financial activities, real estate, professionals and administrators dropped 9.8%. 

Source: Globo (in Portuguese) Unemployment Continues to Rise in Brazil

Ambev Releases Cold Beer Delivery Service

Latin America's largest brewer, Ambev, has recently announced it will provide delivery service for cold beer in Brazil.

The unique delivery service will first be available in the greater Sao Paulo area, Sao Paulo proper and Ribeirao Preto before being expanded into other regions and cities across the country.

The idea of cold beer delivery was born at Ze Delivery, an in-house delivery provider of Ambev. Ze Delivery offers Ambev's most recognizable brands and specialty beers and imported beers.

Customers can also request other alcoholic drinks as well as non-alcoholic drinks, such as soft drinks and energy drinks. Depending on the region in question, Ze Delivery will deliver even barbecue staples like meats, ice and charcoal.

Products can be delivered within an hour and come cold or frozen. To request a delivery customers must access the company's website, type in their zip code and choose their products. Payments can be made with credit or debit cards or cash, and the service is available through the late night.

Source: Supermercado Moderno (in Portuguese) Ambev Starts Cold Beer Deliveries

French Automotive Company Expands in Brazil

French automotive manufactuer, Renault, recently announced it will be producing two new models in Brazil. The news is welcomed in South America's largest economy as the country goes through its worse economic crisis since the 1930s.

Specifically, Renault will begin producing Captur, a sports utility vehicle, and compact car, Kwid. Production will take place in the country's Southern region in the capital of the state of Parana, Curitiba. The news was announced last Thursday by Renault-Nissan Alliance CEO, Carlos Ghosn.

In front of reporters in the city that will produce the new models, Ghosn said that he "sees the Brazilian market stabilizing after steep sales reductions amid the country's worst recession in decades."

According to association and manufacturer data, Renault ranked sixth among automotive manufacturers in 2015 having sold 180,532 vehicles, a -23.7% drop from the previous year. In Brazil in 2015, Fiat, Chevrolet, Volkswagen, Ford and Hyundai led manufactuers. Renault held the same position in 2014 when it sold 236,721 vehicles.

Among the top ten models sold in 2015, the compact car, Renault Sandero, held the eighth position with 77,838 vehicles sold, a decrease of -22.5% from the year before. Despite the decrease, the model moved up a spot from 2014 when 95,385 Sanderos were sold across Brazil.

Captur and Kwid models are expected to be with Brazilian car dealerships by 2017. Renault is betting on these models to help it increase its market share of 6.7% in the country. More specifically, the Brazilian-born Ghosn said he is targeting 8 percent share with long term goals of 10 percent.

Regarding the Brazilian auto market, Ghosn said:

"Right now we see Brazil's auto market recovery with great hope. I don't think anybody believes the Brazilian market will stay around 2 million vehicles (of annual sales)."

As recently as 2009, Renault had less than 4% of the market. After adding to its capacity and releasing popular new models, the company's share grew. In particular, the company's SUV, Duster, was able to take on other popular SUV models, such as the Ford EcoSport.

Overall, auto sales in the South American giant have been cut in half since peaking in 2012. The main culprit is a gripping economic crisis that has led to high inflation, low consumer confidence and high unemployment. Furthermore, governmental and industrial policies have hurt the industry. The final cost of a car in Brazil may be composed of up to 50% in taxes.

Auto manufacturers are hoping the market has stabilized and growth is in store in the near future.

According to Ghosn Brazil has the potential to sell 3.5 million to 4 million cars a year.

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Read more at Business Insider Renault to Produce Two New Models in Brazil

Gol Airlines Makes Changes

Gol Airlines, the second largest Brazilian airline, has decided to swap their Chief Financial Officer and board members as the company restructures.

Gol's restructuring is taking place during an economic upheaval in the South American nation. Gol is the second largest airline behind TAM. Earlier this year TAM finalized its partnership with Chilean airlines, LAN, to create LATAM. Read more about the merger TAM Merger Best for Consumers

The Brazilian airline has decided to hand over the reigns to the chief financial officer who took the company public. The company also named two new board members as the company needs to restructure its debt as the economic crisis wrecks the country's travel industry. Gol is hoping these changes will attract bondholders' cooperation.

Gol Linhas Aereas Inteligentes SA began in 2001 and began offering international flights by the end of 2005. By 2014, the company owned 32% of the market share in the country. In 2016, the company staved off bankruptcy selling nearly half of their shares to American airline, Delta.

It was in 2003 that Gol's former and newly appointed CFO, Richard Lark, took the company public on the country's stock exchange, Bovespa. Lark held the position from 2003 to 2008. Lark's nomination to his former post was made public via a securities filing made last Thursday. Lark's seat will be filled by Andre Janszky who is the managing partner of the law firm, Milbank, Tweed, Hadley & McCloy's Sao Paulo office.

Current CFO, Edmar Prado Lopes Neto will continue with the company and "will take on new challenges within the group after the transition is completed," according to the securities filing. It was Neto who earlier this month noted that an unpopular bond swap was no enough to resolve the company's debt burden. The debt burden has resulted in four years of heavy losses and puts the company in a difficult situation as the country's economy continues downward.

Ana Luiza Constantino, who is a member of the company's controlling family, will take the board seat of Henrique Constantino. Henrique was arrested in July in the Lavo Jato corruption investigation, which has confiscated a large amount of funds and has arrested many politicians and businessmen. The investigation has also contributed to the suspension of Brazilian president, Dilma Rouseff.

Read more from Reuters Gol Substitutes Management

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Sales Rise for Coca-Cola in Brazil

In Brazil, sales for Coca-Cola totaled 9.264 billion Mexican pesos (US$ 493.2 million) in the second trimester of 2016. This represents a 5% increase in comparison to the same time period the year before.

While in value sales rose, in volume sales of Coca-Cola fell in the country. In volume, sales fell 4.6% between April and June equaling 148 million boxes. During the period, sales of soft drinks fell -5.2% in volume to 130.5 million boxes. In terms of revenue, sales of soft drinks rose 6.3%, according to the company.

Coca-Cola Femsa also presented a drop in volume in sales of water of -1.2% and other non-alcoholic drinks, -2.5%.

According to the company, revenue of beer in Brazil reached 1.514 billion Mexican pesos (US$80.6 million) in the second trimester.

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Read more at Supermercado Moderno (in Portuguese) Sales Rise for Coca-Cola in Brazil

Carrefour Relaunches E-Commerce in Brazil

For the second time, French company, Carrefour, will launch e-commerce in South America's largest economy. At first, the new operation will include non-food items. The sale of food items is projected to start in 2017.

Following an unsuccessful experience between 2010 and 2012, the Brazilian arm of Carrefour, Grupo Carrefour Brasil, relaunched its e-commerce platform yesterday, July 26. Carrefour.com is the result of two years of investments of high tech and specialized equipment for the sector. The new e-commerce that includes a team of 300 employees will be run by Francisco Donato, former Walmart.com and Magazine Luiza manager.

With the new e-commerce platform, the Brazilian operation of the company becomes the only one in the world with all formats.

"The beginning of the e-commerce operation in Brazil reinforces our omnichannel strategy. We invest in high performance technological solutions and in qualified professionals to construct an innovative operation," said Charles Desmartis, GEO of Group Carrefour Brasil.

After observing how e-commerce functioned in Carrefour stores in France and Spain, Donato brought the European know-how and made adaptions for Brazilian consumers. In the beginning, the website will offer a variety of products from 12 categories divided between Home and Family, Tech and Electronics, Health and Well-Being and Kids.

"Our focus will be on Home and Family. Our research reveals that the image of Carrefour Brasil, our brand, is associated with Home and Family. We will sell electronics, because we need to sell electronics as well," explained Desmartis.

By the end of 2016, the website will increase its product offerings starting with its marketplace operation, including Automotive and Tools, Culture and Leisure, Fashion and Pets.

"We intend on being an Amazon. Our operation will be slim, but with quality," said Donato.

Food items are expected to be sold via the site next year.

"It's natural given that food sales is an enormous part of Carrefour. Besides this is something that is rarely explored in Brazil, and we want to be the leaders in this," explained Donato.

Looking to the long term future, the retailer is also betting on progressive integration of this platform with physical stores. This will make it possible for customers inside of the hypermarkets to acess the e-commerce site, integrating the channels and providing a wider variety of products. According to Donato, clients will be provided with many services that will make things easier like exchanges and returns and technical support of the e-commerce site inside the physical stores.

"By the end of the year we want to have 30,000 items available on Carrefour.com. In 2017, we want to have 200,000," said Donato.

In the first stage of the company's plans, the e-commerce platform with service the highly populated Southeast region of the country that includes Sao Paulo and Rio de Janeiro.

"First, we want to take a look at the performance of the operation in the Southeast and gradually expand to the South, Midwest, Northeast and North, respectively. This take place in the coming months," said Donato.

Carrefour.com will rely exclusively on a distribution center in Embu das Artes, Sao Paulo.

Read more at Supermercado Moderno (in Portuguese) Carrefour Relaunches E-Commerce in Brazil

Rivals Have Eyes on Brasil Kirin

Brasil Kirin, the Japanese beer maker in Brazil, has been the target of other large international brewers including Heineken, Ambev, and Carlsberg.

Five years after buying Schincariol, Japanese group Kirin, has seen its shares in Brazil become the target of international brewers. Since taking over the company for more than R$6 billion, Kirin has seen its position weaken amidst a crumbling economy and changing consumer behaviors. The company's capacity is significantly larger than its sales. Among the company's options include the total sale of shares or a large portion of them, according to sources.

According to the newspaper Estado de S. Paulo, Dutch brewer, Heineken would be interested in buying all of the company's shares. Negotiations have not yet been formalized. One source, however, has confirmed that representatives of Heineken have held a meeting with Kirin in Japan at the end of June to try to define the bases for formal negotiations.

Heineken's appetite is large as the company has seen its global position weakened after the fusion of AB InBev and SAB Miller, which today own approximately 30% of the global market of beers.

Within Kirin's global portfolio of beverages, Heineken's main interest is in Brazil. The Dutch company, which entered the country via the purchase of Femsa has been able to grow and solidify its brand as premium and has been able to beat out Kirin with 9.4% sales of the sector.

Among the other competitors, Carlsberg, would use Kirin to establish some type of relevance in the country. For Ambev, the purchase would represent a low cost acquisition of Kirin's factories. The purchase would also help protect the company's two-thirds dominance of the sector.

Kirin has publicly denied all speculation about its strategic position.

Read more at Supermercado Moderno (in Portuguese) Rivals Looks to Buy Kirin

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Possible Trade Challenge from Brazil Against Canada

According to Reuters, Brazil is mulling over a possible World Trade Organization challenge against Canada for state funding of its airplane manufacturer, Bombardier. Brazil, which is suffering from a devastating economic crisis, is looking to protect the overseas competiveness of its airplane manufacturer, Embraer.

Canada is funding the airplane maker, which has been struggling.

The announcement of the possible challenge came from Foreign Minister, Jose Serra, of Brazil's interim presidency. Current Brazilian president, Dilma Rousseff, is suspended and awaiting her impeachment trial.

More specifically, Serra, a presidential candidate in 2002, said that a $1 billion investment in the struggling airplane manufacturer by the province of Quebec was a "subsidy" and was unfairly advantageous over Embraer.

Bombardier and Embraer are among the world's largest airplane manufacturers. Both are fighting for market share as the industry struggles with slow growth.

Read more at Business Standard Brazil Considers WTO Challenge

Coca-Cola to Make Acquisitions in Latin America

Constantly releasing new products and making new acquisitions will be the focus of Coca-Cola states Xiemar Zarazua who will leave his post as leader of Coca-Cola in Brazil in October after right years at the helm. "We prepare for difficult moments," said Zarazua.

Despite leaving his post, Zarazua will not be leaving the company. In fact, he will take the role of vice president of strategic endeavors for the company in Latin America. The Mexican will be replaced by Brazilian, Henrique Braun, who worked for the company in China and South Korea.

"In Latin America there are enormous opportunities. We have already seen consolidation in the areas in which we are in and we need to enter those areas that we are not in. We have an appetite for all categories. We release new products or we buy," said Zarazua regarding Brazil and neighboring countries.

Under Xiemar's time, one of the longest presidents at Coca-Cola Brazil, the company bought at the end of 2015 Laticinio Verde Campos from Lavras, Minas Gerais. In June, the company bought Ades in Latin America from Unilever. The acquisition was done in partnership with the Mexican soft drink bottler, Femsa.

When Xiemar arrived in Brazil Coca-Cola had just purchased Leao Junior, a tea brand. A year before the company had acquired juice company, Del Valle, which led the leader to restructure the company's portfolio of products.

At the same time, the company reduced the number of franchised bottlers from 16 to 10 with joint ventures and acquisitions among bottlers.

These consolidation moves, according to Xiemar, brought the company scale-ability and reduced costs helping to the company to better position itself to face downturns in the company similar to the one Brazil is currently facing.

"We prepare for difficult moments and we did well. At the time we made changes, we didn't used to have this belief system, but the results have made us stronger. We are suffering for sure, like everyone, but we were prepared. I doubt any company in Brazil is not worried," stated Xiemar.

According to the System Control of Drink Production (Sicobe) of the country's Internal Revenue Service, overall soft drink production in the country fell 8.2% in June to 956.3 million liters, compared to the same month in 2015. In comparison with May, there was a drop of 16%.

Read more at Supermercado Moderno (in Portuguese) Coca-Cola Predicts Acquisitions in Latin America

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Dip Frangos Cuts Production By 12.5%

Dip Frangos, subsidiary of Diplomata Group, a chicken factory from the southern state of Parana, has announced a cut of 12.5% of production.

Production cuts are a result of higher prices of corn as well as lower demand for the white meat. According to executive-director, Othmar Rempel, the company will lower its number of chickens from 120,000 chickens to 105,000 chickens. The reductions are to take place within the next 45 days.

The cut of production will also result in the loss of approximately 100 jobs at the Capanema, Parana plant. However, Rempel claims their will not be any job losses. He states that the company will simply not rehire any new workers over the next 45 days. According to him, the company has high turnover with approximately 8% of workers leaving every month. Today, Dip employees 953 workers at the plant.

In 2016, Dip is expected to have revenues of R$225 million in chicken.


Read more at Supermercado Moderno (in Portuguese) Dip Frangos Cuts Production

Sales of 100% Grape Juice Slowdown

Sales of 100% grape juice grew just 0.41% in the first five months of 2016. While consumer habits have changed during the country's economic crisis, Brazilians are not necessarily removing grape juice from their shopping carts.

After a 2015 in which the product saw an increase of 29.8% in volume, the sales of 100% grape juice grew just 0.41% between January and May of this year compared to the same time period the year before. The main reasons for lower sales is higher unemployment and lower income among Brazilian consumers. Estimations are that sales will be much lower than 2015 considering the country's economic struggles.

Dirceu Scotta, president of the Brazilian Institute of Wine (Ibravin) also blames an increase in the cost of production given the drop in this year's grape harvest and an increase in the IPI and ICMS taxes. These factors mean a higher price that consumers see in the supermarkets.

Even so, Scotta doesn't believe consumers will stop buying the juice. Brazilians continue to purchase healthy products, though, the frequency and quantity of these purchases have fallen.

Supermarkets will have to pay close attention to those factors that determine a consumer's purchasing decisions at the time of purchasing. According to the manufacturer, Famiglia Zanlorenzi, social classes A and B choose the based on the type of packaging. Then, they make their decisions based on brands, effectiveness, price and label information. Social classes C and also are concerned by the packaging type, but only after evaluating the price.

Making consumers aware of the products health benefits can also help increase sales. It's important that the consumer knows about the absence of preservatives and sugar as well as the fact that the product doesn't raise glucose levels. They also need to know that it is 100% natural fruit juice.

According to specialists, the drink helps protect the body from toxins and free radicals. It is also reduces the formation of fat in the blood, which helps reduce the levels of bad (LDL) cholesterol and raise the level of good (HDL) cholesterol.

Read more at Supermercado Moderno (in Portuguese) Grape Juice Sales Down

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National Wines and Sparkling Wines See Lower Sales

The sale of nationally produced wines and sparkling wines dropped 6.3% over the first five months of 2016 in Brazil. Ibravin, the Brazilian Institute of Wine, reported the sales numbers, which are a comparison of the same time period in 2015.

The main culprit in the drop in sales is the fall in the grape harvest in the Southern region of the country. Compared to last year, the harvest fell 57%. Additionally, the rise in taxes on the products resulted in lower sales.

"With the increase in the IPI and ICMS taxes in a lot of states, taxes now account for 56% to 77% of the product's final price," said president of Ibravin, Dirceu Scotta.

Before federal tax accounted for just R$0.73 per bottle, but now represents 10% of the value of the unit.

Up to 2015, the market fought back the country's economic crisis and sales rose 1.68% in comparison to 2014.

"The strong dollar had a positive impact at first, but with the high tax rate we lost the competitive advantage we had obtained."

Harvesting at the Salton Vineyard in Rio Grande do Sul fell from 15 million kg to 6 million kg this year stated the executive-director, Luciana Salton. "Before the stocks that were problematic ended up being our salvation."

Salton is expected to limit its product line of wines and sparkling wines due to the lack of natural resources. One solution is to launch products using Malbec grapes from Argentina. "Our first importation will be 40,000 boxes."

Despite the problems in the sector, sales for the company in the first half of the year were stable. According to Salton, in 2015, the company had revenues of R$338 million.

Read more at Supermercado Moderno (in Portuguese) Wine Sales Fall

Sales of Appliances Fall 16.5% in Brazil

The sale of appliances have dropped 16.5% in South American's largest economy. In particular, the fall in sales comes mostly from the "brown" line appliances, such as televisions and audio equipment.

Reasons for the drop in sales include the difficulty of consumers getting credit and low consumer confidence leading consumers not to want to take on debt.  The fall in appliance sales has led to numerous store closings of major appliance brands like Ponto Frio.

According to results released by the Brazilian Institute of Geography and Statistics (IBGE) on Tuesday, retail sales in volume have dropped for 14 consecutive months in Brazil. Overall, the decrease has totaled -7.3%. Appliances have fallen for 16 consecutive months.

The brown line of appliances tend to be more expensive and sales often depend more on financing for consumers, something which is rare today in Brazil.

Via Varejo, owners of Casas Bahia and Ponto Frio, closed 21 stores in the first trimester of 2016 due to low sales of appliances. In 2015, the company had closed 39 stores.

According to the association of manufacturers, Eletros, sales of brown line appliances have fallen 40% in 2016. The country produced 2.5 million televisions through April, a drop of 29.72% compared to the same time the year before and a decrease of 58% compared to 2014.

Lourival Kicula, president of Eletros, the devices have high penetration in the market. In times of crisis, there is little motivation to upgrade.

Right now, the expectation is that sales and production numbers could get worse in the second half of the year.

For more go to Supermercado Moderno (in Portuguese) Appliance Sales, Production Down

Real Estate Powerhouse to Invest R$1 billion in Betim

Brazilian real estate giant, MRV, has plans to invest R$1 billion in Betim in metropolitan Belo Horizonte in the state of Minas Gerais.

Reasons given for choosing Betim by the company include trained, ready workers, high income among area residents and ability to find large tracts of land.

"Let's make something new in Betim," said an excited Rafael Menin, CEO of the Minas based company.

The investment will be divided between two projects. One plan is the construction of 8 apartment buildings with nearly 4,000 units. The construction is expected to take five years and cover an area of 642.44 thousand square meters.

"This will be a new neighborhood with sensational urbanization. It will have a cooper boulevard, 500 imperial palm trees and a marvelous park. It will be a place for a community."

Most apartments will have two bedrooms. They will also be part of the government housing project, Minha Casa, Minha Vida. These apartments are scheduled to be ready by the end of 2017. The average price of the units is expected to be R$160,000 with total sales of R$700 million.

"The boulevard is expected to be ready in November where we are investing almost R$40 million," said Menin. The boulevard called, Boulevard das Cachoeiras (Boulevard of Waterfalls), is a 2.2 km roadway that will connect the construction to the highway BR-262 as well as a park and cultural square in Betim.

The second plan of the investment includes the construction of a new industrial park, the Industrial Park of Betim (PIB). The R$500 million investment will cover an area of 6 million square meters and will be constructed by Log Commercial Properties. Log is the logistical arm of MRV.

"It will be the largest, private industrial park in Minas Gerais," stated Menin. The CEO claims the park has the potential of generated 66,000 jobs directly and indirectly once companies are installed.

MRV's construction plans for the eight apartment buildings are expected to create 1,360 direct jobs and 4,000 indirect jobs.

MRV is a publicly traded company on Brazil's stock exchange, Bovespa. MRV is present in 142 Brazilian cities with 240 construction sites.

Read more from O Tempo (in Portuguese) MRV Invests 1 Billion

Tang Looks to Win Tea Market in Brazil

Tang, the brand most known for its iconic powdered orange drink, is now setting its sights on taking over the tea market in South America's largest economy.

Currently owned by international food and drink conglomerate, Mondelez, the brand will look to compete with a focus on social classes C and D. Tang intends on selling their powdered tea packets for around just R$.

The Tang tea products are similar in format and packaging as the brand's powdered juices. The format and packaging types are cheaper and more affordable for lower social classes as well as middle and higher social classes as the country is going through its worst financial crisis since the 1930s.

Tang's push into powdered teas started earlier in the year as a bet on the country's summer season. Summer runs from December to March in Brazil. Most of the brand's advertising will take place at points of sales in hypermarkets and supermarkets.

Mondelez did not release how much they invested in this endeavor.

"Among the beverage categories in which we compete indirectly, ready teas is the category that grew the most. This is a big opportunity for us," said Fabio Melo, the brand's marketing manager, to magazine, Exame.com.

The expectation is that the product will win over social classes C and D with a low price. "Besides being in powdered form, it is the closest thing to iced tea. Ready tea is refreshing and people want to buy it, but it costs almost R$5. Tang is a R$1 product and produces 1 liter of beverage," said Melo.

Tang powdered tea is already sold in Mexico and Argentina. It took the company two years to produce flavors favorable for Brazilians taste. Delays were also caused by the company evaluating the right time to launch the product to the national market.

Sales to retailers started in September, and the product was available on the shelves in June 2016. Flavors include Mate Tea with Guarana, Black Tea with Lime, Black Tea with Peach and Mate Tea with Orange.

Source: Supermercado Moderno (in Portuguese) Tang Enters Brazilian Tea Market

Coconut Water, Tea and Mineral Water Continue to Grow

In 2015, coconut water, tea and mineral water were the only beverage categories to expand. Coconut water grew 12.4%, liquid teas 10.3% and mineral water 5.2%.

According to a study by The Nielsen Company, these three categories were the only non-alcoholic categories to continue to grow in 2015. From May 2015 to May 2016, 11 categories were studied by Nielsen. RTD teas had the greatest growth during this time period at 5.8%. Next was mineral water with a 2.8% increase and coconut water, which expanded 1.8%.

When looking at just 2015, these three categories were also the only ones to expand with coconut water at 12.4%, 10.3% for teas and 5.2% for mineral water. Other beverages included in the study were soft drinks, ready juices, powdered juices, energy drinks, soy-based drinks, sports drinks and guarana. All of these categories fell last year.

Reasons given for the changes in consumer preferences include healthiness of the products as well as promotions, economical packaging and cheaper brands. Soft drinks is one of the categories that suffered the most as consumers replaced the sugary drinks with powdered juice, ready juice or juice made at home.


For more information go to Supermercado Moderno (in Portuguese) Healthy Beverages Still Growing

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Sony Mobile to Look Past Brazil

Japanese technology company, Sony, announced that their smartphone business will "defocus" in the US, India, China and Brazil. The announcement was made during the recent investor day in Tokyo.

It is believed the decision is to reduce the major operating losses of the company's smartphone division in these countries. In the case of Brazil, the country is going through an economic crisis not seen since the 1930s. Inflation is rampant and consumer confidence is low. Furthermore, the country's currency, the Real, has been greatly devalued against other currencies, such as the dollar, meaning multinational companies would be forced to increase prices significantly to make up the difference.

Overall, Sony;s global average annual growth of the smartphone market dropped 1.4% because of slow growth in emerging markets, like Brazil. Emerging markets account for 45% of the volume market.

Despite directing their business to East Asia, Europe and the Middle East, Sony will maintain it's status in Latin America.


Source: University Herald Sony Defocuses on Brazil

Monsanto, Microsoft to Invest in Brazil

Agricultural powerhouse, Monsanto, and technology giants, Microsoft and Qualcomm, have formed a partnership in the form of a fund to invest in agricultural technology startups in Brazil.

The Brazilian investment fund was originally setup by Microsoft. Monsanto will be investing up to R$300 million, but the fund will continued to be managed by Microsoft. Monsanto will look for new digital tools that can be applied to agricultural production in the country.

The fund will initially chose ideas and provide up to R$1.5 million in funding for early development. The investment will have to be paid back to the fund or project owners will have to provide equity after three years.

For more read this article from the St. Louis Post-Dispatch Investment in Brazilian Agricultural Startups

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Industrial Production Remains Stable

According to the Brazilian Institute of Geography and Statistics, industrial production fell in May in 8 of the 14 cities studied. Overall, on a national level industrial production was stable.

The numbers on production were based on the industrial production in May compared to the previous month. The greatest drops occurred in the states of Parana (-3.5%), Goias (-2.3%), Para (-1.9%), and Sao Paulo (-1.6%).

On the other hand, Amazonas' industrial production grew 16.2% between April and May. The state's capital, Manaus, is home to a free trade zone. The state had suffered a decrease of -12.5% in April.

Other states with industrial production growth were Rio Grande do Sul (4.4%), Espirito Santo (3.8%), the Northeast region (1.6%), Ceara (1.4%) and Santa Catarina (0.1%).

Compared to May 2015, industrial production dropped 7.8% in 2016. 12 of the 14 cities studied had less industrial production than the year before. The states that loss the most were Espirito Santo, which fell -18.9% and Parana at -11.0%. On a positive note, Mato Grosso expanded 14.6% and Para 7.8%.

Between January and May 2016 national production fell in 12 locations. The national average was -9.8%. Espirito Santo led the way at -21.6%, followed by Amazonas -18.8% and Pernambuco -18.7%. States that have grown since January include Para at 9.6%, Mato Grosso at 7.4% and Bahia at 1.2%.

Source: Globo (in Portuguese) Industrial Production 2016

McDonald's Adds Rustic Potatoes to Brazilian Menu

McDonald's is known for a lot of things, but one menu item that has been a staple since the beginning is the fast food joint's crispy, delicious French Fries. Now, in Brazil, McDonald's plans to add a new potato along with their classic.

The inspiration for rustic potatoes didn't come from the company's American headquarters, but instead French franchisees of the chain who already found success with the menu item. The rustic potato comes in a noticeably thicker format and is covered with paprika and other spices.

"To develop the rustic potatoes we used the same potatoes we use for the McFritas, a flavor icon for our customers," said Ives Uliana, Supply Chain Manager for the company.

McFritas is side dish of French Fries covered in melted cheddar and bacon.

In recent years, McDonald's has seen increased pressure in Brazil from rival Burger King. Additionally, the country is going through a burger craze with many opening up gourmet burger shops. Finally, McDonald's and Burger King have had to rethink their pricing as the country is gripped by a serious economic crisis.

Wendy's to Open Up Shop in Brazil


Source: UOL (in Portuguese) Rustic Potatoes at McDonald's in Brazil

Pet Market Expected to Grow 6.7% in Brazil

Brazilians love their pets, and they're doing so by spending more and more of their reais on their dogs, cats and other pets. Estimates show the pet market growing 6.7% in 2016 compared to 2015.

Pet food is the largest piece of the pet market pie accounting for 70% of revenue. The rest of the market is made up of bathing and grooming, tools, accessories, hygiene and beauty products and veterinary medicine.

Brazil is one of the largest markets for the pet market in the world. It is estimated that this year pet companies in Brazil will ear R$19.2 billion. Estimates come from Abinpet, the Brazilian Association of Pet Industry Products. In 2015, the market grew 7.6%.

Manufacturers of pet products defend a reduction of taxes on their products as a way to strengthen the industry.  Abinpet estimates that taxes represent 51% of the final price of pet products.

This year the amount of pet food estimated to be produced in the country should reach 2.5 million tons, an increase of 2.5%.

Abinpet states that Brazil has the third largest pet market in the world in revenue. The United States by far has the largest market with 42% of a US$102.2 billion global market. The UK has 6.7%, while Brazil has 5.3%.

According to the Brazilian Institute of Geography and Statistics, in 2013 Brazilians had 52.2 million dogs, 37.9 million birds and 22.1 million cats. This is the fourth largest pet population in the world behind China, the United States and the United Kingdom.

For more go to Supermercado Moderno (in Portuguese) Pet Market Grows in Brazil

Expenditures on Technology to Drop in 2016

In 2016, Brazilians are expected to spend 17% less on technology purchases. According to projections from market research firm, GfK, technology expenditures will fall even further in 2017.

In total, Brazilians are expected to buy technology products worth US$20 billion in 2016. The sector, which includes smartphones, tablets, TVs and more, is being most affected by the country's economic crisis. GfK expects sales to fall another 3% in 2017.

"This is a market that depends a lot on credit and consumer confidence to grow. With a weak economy everything becomes more difficult and the consumer pulls back on purchases," explained Claudia Bindo, Director of New Business at GfK, during the sixth annual Brazilian Retail Week.

In the first half of the year, computer items saw the biggest drop in volume of sales. More specifically, the market saw a loss of 33% compared to the same time period in 2015. The categories with the next biggest drops were telephones (-30%), air conditioners (-27%), electronics (-21%) and white line products (-16%).

To counter, stores are offering installment plans with 13 payments or more.

Between January and April of this year, e-commerce accounted for 20% of sales in value. Among the reasons for buying alone are fast and secure payment, special price offers, speed of delivery and no shipping costs.

For more information go to Supermercado Moderno (in Portuguese) Brazilian Technology Purchases Fall

Most Popular Automotive Companies and Models First Half 2016

Yesterday, I wrote about the most popular car companies and models in Brazil in 2015. Well, the most popular companies and models were just announced, so let me share.

According to Info Money, car sales in June were slightly up from May. In June, 139,559 automobiles were sold in Brazil, an increase of 1.54% in comparison to the same time period in 2015. However, when including the sales of all months in the first half of the year, sales are down 24.65% in comparison to the first half of 2015. In total, 810,681 units have been sold so far this year.

While Fiat led the way in 2014 and 2015, so far in 2016, GM is the leader with 17.53% of the market. Following GM, were Volkswagen with 12.59% of the market and Hyundai with 11.52%. Other companies in the top ten in order were Fiat, Ford, Toyota, Honda, Renault, Jeep and Nissan.

The most popular model in June was the Chevrolet Onix, with 68,525 units sold in the first half and 11,566 in June alone. In second in the first half and month was the Hyundai HB20. See the list below for the top ten.

Top Automotive Models First Half 2016

Chevrolet Onix - 68,535

Hyundai HB20 - 55,922

Ford Ka - 34,571

Volkswagen Gol - 32,489

Fiat Palio - 31,961

Toyota Corolla - 31,891

Chevrolet Prisma - 31,164

Honda HR-V - 30,882

Volkswagen Fox/Crossfox - 26,502

Renault Sandero - 26,415

For more go to Info Money via Yahoo Brasil (in Portuguese) Top Car Companies/Models 2016

Rice, Milk and Corn Next Inflation Victims

We recently wrote about how beans, a staple among Brazilians, have been affected by inflation causing the legume to be sold at never before seen prices. Now, economists and agribusiness market specialists believe that rice, milk and corn prices could rise in a similar fashion.

Changes in weather are believed to be the main culprit. In particular, the irregular distribution of rain this year harmed the production of rice and corn.

As far as rice is concerned, storms in April in Rio Grande do Sul, the largest producer of rice in the country, caused a drop of 15% in production. Consequently, prices rose 5.21% through June, according to the Brazilian Institute of Geography and Statistics (IBGE). Prices are expected to continue to climb through the beginning of 2017.

Specialists believe that the problems with corn, and subsequently milk, are structural problems and thus more concerning. Prices of corn rose 13% through June. Milk prices rose 18% during the same time period.

One of the reasons for the higher prices in corn is that the country decided several years back to start exporting it in large quantities. High demand and prices abroad eventually caught up to the domestic market.

Read more at Supermercado Modern (in Portuguese) Rice, corn and milk prices rise

Beer and Soft Drink Production Falls in June

The production of beer fell 1.2% in June compared to the same time in 2015. Production equaled 964.2 million liters, according to Sicobe (System of Control of Production of Beverages). Compared to the previous month, production fell 4.2%.

As far as soft drinks are concerned, the sector dropped 8.16% in June compared to June 2015. Production fell 16% compared to May. In total, 9.563 million hectoliters of soft drinks were produced in June. June marked the first time since 2011 that less than 10 million hectoliters of soft drinks were produced in a month.

Read more at Supermercado Moderno (in Portuguese) Beer, Soft Drink Production Down

Brazilian Brewer Sells Assets, Cuts Costs

The local operations of brewer, Brasil Kirin, has already disposed of one of its thirteen factories and promises headquarters that it will reduce expenses by R$200 million this year alone.

In 2011, Japanese brewer, Kirin, spent almost R$4 billion for control of the family brewer, Schincariol. At the time, Schincariol was the second largest brewer in Brazil. Having grown 7.5% compared to the previous year, Schincariol was becoming a serious threat to leader, Ambev. Five years later, the situation has radically changed as a result of Brazil's economic crisis. As a result, Brasil Kirin saw its share of the market drop 25% placing it in fourth place in sales in the country.

The situation has reached such a critical point that last month the president of the company, Andre Salles, presented a plan for recuperation of local operations to headquarters in Japan. Proposed changes include reorganization of the company's portfolio of brands and a promise to cut costs by R$200 million this year alone.

In 2015, the Japanese company reported the first loss in its history with the loss of sales in Brazil being cited as the main reason.

Last year, revenues for Brasil Kirin fell 25.4%, around 134 billion yen or 1.3 billion US dollars. Losses were due to the depreciation of the Brazilian real as well as to a drop of 16.8% in sales in comparison to the year before.

For more go to Supermercado Moderno (in Portuguese) Brasil Kirin Sells Assets, Cuts Costs

Fiat Leads Car Manufacturers in 2015

In 2015, Fiat sold more vehicles than any other automotive manufacturer in Brazil. In total, the brand sold 436,879 vehicles in 2015 down from 698,210 the year before when the manufacturer was also the leader. An unprecedented economic crisis has caused serious drops in sales of all automotive manufacturers in Brazil.

The next three manufacturers following Fiat were Chevrolet, Volkswagen and Ford. The manufacturers held the same spots they held in 2014. All manufacturers saw serious drops in sales between 2015 and 2014.

Top Ten Automotive Manufacturers in 2015

Fiat

Chevrolet

Volkswagen

Ford

Hyundai

Renault

Toyota

Honda

Nissan

Jeep

Despite being the automotive leader, the Chevrolet Onix beat out the Fiat Palio as the top automotive model. Besides the Palio, Fiat had two other models - Strada and Uno - among the top ten automotive models sold in 2015.

Top Ten Automotive Models in 2015

Chevrolet Onix

Fiat Palio

Hyundai HB20

Fiat Strada

Ford Ka

Volkswagen Gol

Fiat Uno

Renault Sandero

Volkswagen Fox

Chevrolet Prisma

Sources: Fenabrave, Abeifa, Jato Dynamics and automotive manufacturers. 

China the Most Popular Source for Imports

In 2015, Brazil received more imports from China than any other country. In total, Brazil USD$30.7 billion worth of goods from the Asian nation. Among the top items exported from China to Brazil in value were telephones and telephone items (USD$1.3 billion), radio diffusion and television devices (USD$1.2 billion) and boat headlights, cranes, docks and floating docks (USD$948 million).

Following China was the United States, which exported USD$26.5 billion worth of goods and Germany, which exported USD$10.4 billion.

Argentina was the fourth largest exporter and the largest exporter within the Mercosul trade bloc. USD$10.3 billion worth of goods flew from Argentina into Brazil.

Completing the top ten nations exporting to Brazil were South Korea, Japan, Italy, Nigeria, France and Mexico.


Source: Secretary of Exterior Commerce.

Fewer Brazilian Millionaires as Economy Falters

If you've read the news over the last few months, you know that things aren't going well in Brazil. Not even the super rich have been able to escape the economy's tentacles. In fact, the number of millionaires in Brazil fell 6.4% between 2015 and 2014.

According to a study done by Capgemini, the number of super-rich fell from 161,200 in 2014 to 148,500 in 2015. Main reasons for the drop include not only the economic crisis, but an overreaching political scandal as well.

For more read Lise Alve's article in The Rio Times Number of Millionaires Fall in Brazil

Assai Invests R$45 million in Manaus Store

Retailer, Assai Atacadista recently invested R$45 million in a 15.5 thousand square meter store in the Amazonas capital, Manaus. The store will include 5.7 thousand square meters of retail space and 30 checkout counters. The store in Manaus is the company's first in the North region. Assai has locations in all other regions of the country.

In addition to the floor space and checkout counters, the store will have 412 parking spaces. Assai stores hold approximately 7 thousand items including food stuff, perishables, hygiene products, beverages, cleaning products and fresh produce. According to Belmiro Gomes, president of Assai, the company grew 36.2% in the first trimester of 2016 compared to the same time period the year before. The company closed 2015 with growth of 25.5% compared to 2014. Store openings have played a major role in the company's expansion and growth.

Read more at Supermercado Moderno (in Portuguese) Assai Invests R$45 million in Manaus Store