Lala Closure: Milk will be Purchased by Dos Pinos

As a result of the closure of Grupo Lala's factory in Costa Rica, the 37 thousand liters of milk that 70 local producers sold daily to the company of Mexican origin were left without a buyer, however, Dos Pinos promised to acquire the product.

Wednesday, December 9, 2020

On December 1st Grupo Lala informed that it will close the milk plant that operates in the province of Alajuela. According to the company, the factory will stop operating on December 11th.

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The plan of the business group is that the capital released by this closure will be reassigned to its businesses in Nicaragua and Guatemala, where there is more potential to achieve sustainable and profitable growth.

After the news was released, the government announced that it would ask the dairy company to delay its departure, since 70 producers are members of the Regional Agricultural Cooperative of Milk Producers (Cooperativa Agropecuaria Regional de Productores de Leche R.L.). (Coopeleche), would stop selling 37 thousand liters of milk daily.

Regarding the date of cessation of work, Renato Alvarado, Minister of Agriculture and Livestock, said that the date of closure of the factory is still firm, because after Lala announced in the Mexican Stock Exchange (BMV) his departure from the country, there is no possibility of extending the deadline.

As a contingency plan to give a destination to the milk that will no longer be purchased, Alvarado told that "... 'there was a meeting in conjunction with Dos Pinos, which is another cooperative and that the commitment to address the concerns and demands of Coopeleche. Dos Pinos committed to assume the purchase of the 37 my liters of milk."

Alvarado added that "... We are going to enter into a process of identifying the demand of the Institutional Supply Program (PAI), so that we can process the milk at Dos Pinos and place it in the supply program."

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Competition, Protectionism and Monopolies

December 2020

After Grupo Lala decided to close the operations of its dairy production plant in Costa Rica, a debate began over whether Dos Pinos' dominance in the local market was due to protectionist policies or to the brand positioning, quality and price of its products.

Although at the beginning of 2019 Lala announced that it had invested $14 million in the purchase of high technology machinery and in the expansion of its dairy plant in San Ramón, province of Alajuela, on December 1, 2020 it informed that they decided to close operations.

Grupo Lala Buys Dairy Plant in Costa Rica

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The Mexican company has acquired a dairy production plant in Alajuela and through an agreement with Florida Bebidas will produce and market its products in the country.

The announcement comes days after Nicaraguan authorities blocked entry of Costa Rican dairy products, after Costa Rica denied a permit to the firm Lala to export products from Nicaragua.

Costa Ricans Buy Dairy Plant in Nicaragua

June 2016

The transaction, which was carried out in 2015, was not announced at the time in Costa Rica, where high production costs have prompted several companies to move their operations to Nicaragua.

In 2015 the Costa Rican dairy producer Dos Pinos bought the industrial plant La Completa for an undisclosed amount. Dos Pinos is a cooperative network made up of more than 2,000 associated producers and workers.

Milk Supply Increases in Central America

December 2014

The main dairy producers and exporters in the region are preparing for the beggining of operations in Nicaragua by the Mexican dairy plant Lala.

It is expected that by early 2015 the plant owned by the company Lala will start operating in Nicaragua, meaning that "... Competition for the Central American market over milk and its derivatives will be more intense. "

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