E-Malt.com News article: Mexico: Court agrees to consider SABMiller’s appeal

SABMiller PLC, the world's second-largest brewer by sales, said on August 7 that a Mexican federal court has accepted its case to consider overruling a July antitrust settlement on exclusive sales agreements that SABMiller believes "failed to truly address the monopolistic activities" in the Mexican beer market.

Mexico's Federal Competition Commission stopped short of prohibiting the beer contracts entirely, reaching an agreement with top brewers Anheuser-Busch InBev NV's Grupo Modelo unit and Heineken NV's Cerveceria Cuauhtemoc Moctezuma to limit their use of exclusivity contracts at small shops and some other points of sale, such as restaurants.

The Mexican beer market is the world's fifth biggest by volume sales, according to Euromonitor, although SABMiller claims a miniscule market share. Modelo brands including Corona account for about 58% of the 67 million hectoliters of beer sold here each year, while Cerveceria Cuauhtemoc brands like Tecate represent 41%.

"The commitments made by both brewers are limited by several significant exclusions, which still make it possible to deny access to a majority of retail sales and to large and important regions," SABMiller said in a statement this week.

The antitrust agreement will remain in effect while the federal court examines SABMiller's case, the brewer said.

An official from the Federal Competition Commission declined to comment.

Nearly half the beer sold in Mexico each year is channeled through small mom-and-pop convenience stores, many of which agree to only offer either Modelo or Cerveceria Cuauhtemoc brands in exchange for beer-logo awnings, signs or refrigerators, as well as discounts on beer purchases, credit or assistance with local permits.

In its July resolution, the antitrust authority said that such agreements can make the Mexican retail chain more efficient, for instance by supplying small businesses with financing for improvements and expansion.


09 August, 2013