Mexico: Competition commission launches probe into beer sale and distribution

Mexico's competition commission Cofeco has launched a probe into the distribution, marketing and sale of beer in the country which will include some top companies, Reuters has cited the commission saying on August 9th.

The commission did not mention any names but said it would look into monopolistic practices by market players and distributors, including giving discounts or benefits to merchants to keep them from selling third-party products.

"Some of the most important (beer companies) are involved" in the probe, a Cofeco spokesman said.
The commission will now ask companies under investigation for information on their sales and inventories, among other items, he added. The first leg of the probe could last up to three months.

Mexico's beer market is dominated by Grupo Modelo and FEMSA Cerveza, the beer unit that beverage and retail company FEMSA sold earlier this year to Dutch giant Heineken.

Smaller brewers have tapped the Mexican market in recent years. Their artisanal beers have been able to reach the bar and restaurant circuit in major cities, but they still struggle to gain access to broader distribution channels due to pressure from bigger players.

Cofeco -- which can can slap fines on companies it finds guilty of monopolistic practices -- started the investigation on a request from an unnamed company that considered it was being hurt by monopolistic practices, the spokesman said.

It is not the first time Cofeco has set its eyes on the beverage industry in Mexico, Flex News commented.

Last year, the agency investigated charges that major soft-drink makers were offering perks to merchants, like promotional awnings or refrigerators, on condition they only sold their products.

In 2008, Mexico's Supreme Court upheld fines that had been handed out by Cofeco, totaling almost $15 million, against 15 Coca-Cola bottlers and distributors in Mexico on similar charges.

Among the companies then fined was Coca-Cola FEMSA, controlled by FEMSA, and Coca-Cola Co.

11 August, 2010