By Brasil Stock Guide – The proposed merger between Brazilian pet retail giants Petz SA (PETZ3) and Cobasi came under heavy criticism during a public hearing hosted by the Consumer Defense Commission on Tuesday, according to information provided by the commission.
Lawmakers, consumer protection officials, and representatives from industry groups and NGOs warned that the deal could lead to excessive market concentration, higher consumer prices, the collapse of small competitors, and even rising rates of pet abandonment due to higher costs of care.
Deputy Gisela Simona, who chaired the session, called it “disrespectful” that representatives from both Petz and Cobasi failed to attend. “This was the ideal and appropriate moment for these companies to justify themselves before those who pay their bills: Brazilian consumers,” she said, warning of reduced competition, weaker local commerce, and higher prices for pet food, medicine, and other essential supplies.
Juliana Pereira, president of the Institute for Research and Studies on Society and Consumption (IPS Consumo), cautioned that merging two dominant players could “suffocate” small and mid-sized entrepreneurs in the pet industry. She urged Brazil’s antitrust regulator, CADE, to impose strict remedies if the deal moves forward, saying, “It is imperative to prevent a lack of competition, price hikes, and the crushing of smaller players.”
Industry voices echoed the concerns. Guilherme Davis, CEO of Companhia da Terra, highlighted that the combined entity would generate roughly R$7 billion in revenue, dwarfing the R$3.6 million turnover of smaller operators. “I’m speaking here as a voice for 20,000 to 30,000 small entrepreneurs in the sector,” he said, noting many fear retaliation if they speak out.
Animal welfare advocates also raised alarms. Marília Martins, hospital director at Instituto Caramelo, warned that higher prices could push more owners to neglect or abandon their pets. She said shelters are already overcrowded and struggling to cope.
Talita Lacerda, CEO of Petlove, presented data suggesting that the merger would result in 100% market concentration in 155 Brazilian regions and over 70% in another 42. She said small pet shops face a 35% higher probability of closure when a Petz or Cobasi store opens nearby, and that post-merger, predatory practices could accelerate. “Who suffers most are the pets,” she said, “because with higher prices, families cut items from their care budget.”
Representatives from ProconsBrasil and the National Consumer Secretariat (Senacom) stressed that the merger’s impact on consumers and competition must be carefully reviewed under Brazil’s Consumer Defense Code, emphasizing the need for transparency and consumer awareness.
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