SAO PAULO, Sept 19 (Reuters) – Brazilian fuel distributor Ipiranga has seen its sales volumes rise after police and tax authorities carried out raids to dismantle an organized crime ring in the sector, the company’s chief executive said on Friday.
Multinational energy companies have struggled for years to root out organized crime from their distribution networks in Brazil, and experts had projected the crackdown to result in gains for major fuel distributors.
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Ipiranga’s sales in Sao Paulo state, Brazil’s richest and most populous, are up after the raids, CEO Leonardo Linden said, though he said it was too soon to measure the full impact of the raids on the company’s margins.
“I expect gains in (market share) in August and especially in September,” he said.
Last month, authorities in Latin America’s largest economy launched a series of raids aimed at dismantling multibillion-dollar money laundering and fraud schemes linked to organized crime in the fuel sector.
Brazil’s Instituto Combustivel Legal – an industry group created to combat fuel fraud – had said it expected sales volume for major distributors, including Ipiranga, to rise as a result of the raids.
“I’ve never seen such a significant police operation. … But it can’t stop here,” Linden said. “We need to build a more balanced environment that better encourages companies that do things right in the sector.”
Reporting by Alberto Alerigi Jr; Writing by Isabel Teles and Fabio Teixeira; Editing by Gabriel Araujo and Leslie Adler