Coca-Cola and Dolly's fight in Brazil has taken another twist, according to press reports. Bloomberg said today that Coke's Brazilian unit faces a possible probe by congress, after Dolly accused the company of tax evasion and unfair competition practices.

After a hearing in congress, lower house Deputy Andre Luiz said he may lead legislators proposing to the lower house's 40-member controlling and supervision committee that a probe into Coke's operations should be opened.

A spokesman for Coke in Brazil dismissed Dolly's accusations as "unfounded."

Dolly has accused Coca-Cola of spreading allegations by email that Dolly's beverages could cause cancer and imploring suppliers to suspend sales to Dolly.

A Brazilian Deputy has also claimed that Coke has evaded BRL7 billion (US$2.2 billion) in taxes on goods and services owed to the state of Sao Paulo.