$strFile='
<businesses>
    <entity name="Retail">
      <description>Products and items available in retail</description>
      <product min="0" max="3">
          <description>Product information</description>
        <item name="Title">
          <description>Title</description>
          <text maxlength="80" size="65" />
        </item>
      </product>
    </entity>
    <item name="Patrol">
          <description>Title</description>
          <text maxlength="80" size="65" />
    </item>
    <entity name="Sports">
      <description>Sports Items</description>
      <product min="0" max="3">
        <item name="Title">
          <description>Title</description>
          <text maxlength="80" size="65" />
        </item>
      </product>
    </entity>
</businesses>
';

$strFile=~s#<entity ([^>]+)>\s*(.+?)<product (min="[^"]+" max="[^"]+")>#<block $1 $3>\n$2#gs;
$strFile=~s#</product>\s*</entity>#</block>#gs;
print "\n$strFile";