Brazil Labor Ministry proposes few changes to planned meal-voucher market

MercadoLibre

08/08/2023 22:43

BRASILIA, Aug 8 (Reuters) - Brazil's Labor Ministry said
on Tuesday it favors limited alterations to the planned opening
of the multibillion-real market for meal vouchers, in a blow to
companies seeking to capitalize on legislation enacted last year
that allows employees to transfer their meal credits between
providers.
    The so-called portable system was initially scheduled to
begin in May, along with an "interoperable" framework enabling
expenditures at all affiliated restaurants.  
    But the new rules were still pending government regulation
and, amid uncertainty over which authority would be responsible
for it, the administration of President Luiz Inacio Lula da
Silva issued an executive order deferring their implementation
until May 2024. 
    Lawmakers must vote on the executive order, which has
garnered 33 proposed amendments so far.
    During a public hearing in Congress on Tuesday, Marcelo
Naegele, an auditor from the Labor Ministry, said the ministry
now proposed the elimination of meal credit portability "for
deepening discussions, with expansion of social dialogue and the
possibility of evaluating the results of other measures."
    The Finance Ministry declined to comment.
    In the past, Finance Ministry officials had advocated for
portability as a significant step to unlock the 150
billion-reais ($30 billion) meal voucher market, which is
currently dominated by Sodexo  EXHO.PA , Edenred subsidiary
Ticket  EDEN.PA , and privately held rivals Alelo and VR.
    Recent regulatory changes have created opportunities for
technology-enabled competitors to enter the market, including
delivery company iFood, Mercado Libre's  MELI.O  payments unit
Mercado Pago, financial tech firms Caju, Swile and Flash, as
well as payment company PicPay.
    Traditional meal voucher companies have voiced opposition to
the possibility of transferring meal credits, citing potentially
higher costs. But the emerging rivals had told Reuters that the
market is unlikely to open successfully without being altered to
allow this portability. 

 (Reporting by Marcela Ayres in Brasilia
Editing by Matthew Lewis)
 ((marcela.ayres@thomsonreuters.com; +55 11 5047-2444;))