Mexico's largest Coke bottler, Coca-Cola Femsa (KOF), reported a decline in volumes in Argentina in January and anticipates further falls in February and March as a result of the country's economic problems.

The company added that a 22% average price increase would also have a negative impact on volume sales.

"Volumes declined around 5% (in January in Argentina), which was a surprise because we expected an (even) lower volume number for the month," said Hector Trevino, KOF's chief financial officer. "Our feeling is that we will see larger reductions in volume in February and March.

Argentina accounts for about 7% of consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) at KOF which is 51%-owned by Mexican brewer and bottler Fomento Economico Mexicano (Femsa).

On Tuesday, the company posted operating profit of Peso1.029 billion for the fourth quarter, a rise of 12.2%, with fourth quarter EBITDA of Peso1.303 billion. KOF said it expected volumes in Mexico to grow by between 3% and 5% in 2002 with operating profit rising by between 12% and 14% for the year. But the company declined to make any predictions with regard to the troubled Argentine market.