One of the top drinks companies in Latin America, the Mexican Fomento Economico Mexicano (Femsa), a 112-year-old brewery, has denied plans to sell off its brewing subsidiary, which produces the Tecate and Dos Equis beer brands. Femsa stated that “reports and speculation the Monterrey-based firms wanted to offload its cornerstone beer division and focus on its Coke bottling business were "totally false".

But analysts do not rule out a bid by an international beer giant such as Dutch brewer Heineken or Belgian-based Interbrew given global brewery consolidation trends and the attractiveness of the lucrative Mexican market, Reuters reported.

Grupo Modelo, the No. 1 domestic brewer, and Femsa have a duopoly on Mexican beer -- with only a handful of microbreweries and a trickle of beer imports making any dent in their national sales.

Modelo, brewer of Corona, which is the top selling foreign beer in the United States, is not a likely buyer because of anti-trust rules. The world's top brewer, U.S. Anheuser-Busch Cos Inc. is also out of the picture, as it already owns half of Modelo.

Speculation that Femsa might shed its ailing beer division has risen since the Dec. 23 announcement from its soft drinks arm Coca-Cola Femsa of plans to buy Panamerican Beverages Inc for $2.7 billion plus debt.

17 January, 2003