December 17, 2007 / 10:38 PM / 12 years ago

Peru upset as favorite supermarket goes Chilean

LIMA, Dec 17 (Reuters) - The sale of Peru’s top supermarket chain Wong to a Chilean retail giant has dismayed Peruvians who worry their wealthier neighbor’s latest acquisition threatens to take a bite out of their revered food culture.

"This is not investment. This is Chilenization," Juan Sheput, a former labor minister, said on his blog juansheput.blogspot.com/ on Monday after Cencosud CEN.SN agreed to buy Wong for $500 million.

On raucous radio shows on Monday in the capital, Lima, customers threatened to shop for food elsewhere and complained that supermarkets in Peru, where the country’s diverse and ancient cuisine is part of the national identity, were going Chilean.

“This is going to be a problem for the Wong brand, seen as an attack on national pride, mainly because it involves Chile, which is one of the countries with which Peruvians disagree,” said Rolando Arellano, who runs a consumer marketing company.

Chilean companies have a large Peruvian presence in mining, banking and department stores.

Peru and Chile have strong economic ties but relations have been rocky ever since Chile defeated Peru in the 1879-1883 War of the Pacific and seized a chunk of mineral-rich territory from its northern neighbor.

Currently, the two countries are in a court battle over their sea border, which will define rights to rich fishing waters. They also are soccer rivals and Chileans and Peruvians disagree over the origins of everything from a fruit, cherimoya, to pisco, a grape liquor.

Peruvian cuisine — which includes potatoes and quinoa eaten by the Incas and ingredients from the desert coast, the Andes, and the Amazon rain forest — has undergone a renaissance during the last six years of swift economic growth.

Peruvians have faithfully patronized Wong, which has long emphasized local products. Last month, Lima’s Chamber of Commerce ranked Wong, which was founded by a Chinese family in 1942, as the best “national brand” with the “best reputation” in Peru.

The supermarket chain will retain the Wong name. Wong and Cencosud officials said the deal was a big step forward during a visit to Peru’s presidential palace.

Cencosud chief Horst Paulmann, in an interview in the El Comercio newspaper, promised clients they would receive the same fine treatment in the future as they always got from Wong and said he “saluted all Wong clients.” No major regulatory approvals are needed for the merger to proceed.

Cencosud’s CEN.SN purchase will mean that 74 percent of Peru’s supermarkets are owned by Chilean retailers. Wong has 62 percent of Peru’s market and Chilean retailer Falabella has 12 percent through its Tottus supermarkets.

Supermercados Peruanos, a Peruvian-owned chain, has the remaining 26 percent of the market with its Plaza Vea and Vivanda formats. It could benefit from the deal.

Supermercados Peruanos is part of the Peruvian conglomerate Intergroup (IFS.LM).

“A part of the population will initially find this disconcerting and in the short term this could benefit the competition, which is Supermercados Peruanos,” said Alfredo Torres, chief pollster at the Ipsos Apoyo consultancy in Lima.

Some Peruvians said the sale of Wong reminded them of 1999, when Coca Cola bought the home-grown producer of Inca Kola, an electric yellow soft drink with a bubble gum taste that is Peru’s top-selling soda. (Writing by Terry Wade, Editing by Phil Berlowitz)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below