Brazilian Meal Voucher Market Reform Promises Billions in Savings

Brazil's Finance Ministry has announced measures to reduce intermediation costs in the meal voucher market, aiming for annual savings of 8 billion reais. The new rules, impacting major providers like Edenred and Pluxee, include fee caps and encourage competition, potentially affecting consumer prices and market dynamics.

Brazil's Finance Ministry unveiled a bold initiative aimed at slashing intermediation costs in the nation's meal voucher market. The government anticipates these changes will yield annual savings upwards of 8 billion reais, providing potential relief for businesses and consumers alike.

The newly introduced regulations impose a cap on fees charged by meal voucher issuers, restricting them to a maximum of 3.6% for merchants. Additionally, the payment settlement period has been halved to 15 days. These modifications triggered significant share declines for major players such as Edenred, owner of Ticket, and Pluxee.

Dominating approximately 85% of Brazil's meal voucher sector, companies like VR and Alelo face a transformed competitive landscape. The government mandates greater system access and openness among networks with over 500,000 workers, although a source cautioned that immediate consumer price reductions are not guaranteed.

(With inputs from agencies.)