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

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, Edenred subsidiary Ticket, 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 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)