Grupo Petrópolis, formerly Cervejaria Petrópolis, was founded in the 1990s in Petrópolis, Rio de Janeiro state, and grew to become Brazil's third-largest brewer by volume, behind AmBev and Heineken. It owned popular beer brands including Itaipava, Crystal, Lokal, and Black Princess, and operated eight factories across Brazil.
The company expanded aggressively in the 2010s, borrowing heavily to build capacity and acquire competitors. When Brazil's central bank raised the Selic base rate to 13.75% per annum to fight inflation, the cost of servicing the company's debt became unsustainable. The brewer reported annual interest expenses of R$395 million against declining revenue.
On March 27, 2023, Grupo Petrópolis filed for judicial recovery (recuperação judicial), the Brazilian equivalent of Chapter 11 bankruptcy protection, in a Rio de Janeiro court. The filing disclosed total debts of R$4.4 billion (approximately US$880 million at the time). The company stated that only 40% of its eight factories were operating at normal capacity, reflecting the broader market share loss to AmBev and Heineken.
The court accepted the filing and the proceedings were kept confidential. The company continued operating during the recovery process, which aimed to restructure its debts and return to financial health. The case became one of the largest judicial recovery filings in Brazil's consumer goods sector.
Grupo Petrópolis filed for judicial recovery with R$4.4 billion in debt after Brazil's Selic rate rose to 13.75%, making its debt unserviceable.
The company borrowed heavily during Brazil's low-interest-rate years to build capacity, then Brazil's Selic rate rose to 13.75%, making the R$4.4 billion debt unserviceable
Only 40% of the company's eight factories were operating at normal capacity, meaning the expansion had built far more brewing capacity than the market demanded
AmBev and Heineken squeezed from both sides — AmBev owning the mainstream segment and Heineken the premium imported, leaving Petrópolis with neither volume nor margin
The company's brands (Itaipava, Crystal) were positioned as lower-cost alternatives and could not raise prices enough to cover the debt costs without losing volume to competitors
Grupo Petrópolis borrowed to build capacity when rates were low, then Brazil's Selic hit 13.75% and 60% of factory capacity sat idle. Over-leverage is a bet on low rates — and the brewer lost.
FOLLOW THE EVIDENCE