CADE exclusivity limits threaten iFood

The real risk to iFood is not that a rival suddenly built a better app, it is that Brazil’s regulator is weakening the contract system that kept the best restaurants locked in. In food delivery, the platform with the most popular merchants gets the most orders, and then uses that order flow to keep merchants loyal. Once exclusivity is capped, Rappi and other apps can win access to the same restaurant supply and compete more directly on consumer traffic, delivery speed, and cross selling from grocery and other categories.

• CADE first barred iFood from signing new exclusivity deals in 2021, then formalized a broader settlement in February 2023. The deal bans exclusivity for chains with 30 or more locations, caps exclusive GMV at 25% nationally, and caps exclusive restaurants at 8% locally in large cities. That directly limits iFood’s strongest defensive tool.
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• Exclusive deals mattered because they shaped where consumers could find the restaurants they actually wanted. Internal research shows iFood in Argentina and Pedidos Ya in Brazil both struggled to take share where key merchants were already tied up, and the standoff ended in asset swaps instead of open competition.
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• Rappi is positioned to benefit because it is not just selling restaurant delivery. In Brazil it can use grocery, pharmacy, e-commerce, and partner channels like Amazon Now to bring more orders onto the app, then offer restaurants incremental demand without asking users to change habits one meal at a time.
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Brazil is likely to shift from a market defended by locked supply to one contested through logistics density, promotions, and multi category usage. That favors the player that can bundle more reasons to open the app every week. iFood should remain powerful, but its future lead will be earned more through product and operations, and less through contract structure.