Inca Kola and Coca-Cola are considering stepping up their alliance in Peru, according to press reports. Reuters said on Friday that Jose R Lindley, the maker of Inca Kola, is set to merge its operations with Coke's Peruvian bottler Embotelladora Latinoamericana (ELSA), citing a legal adviser for Lindley.

Alberto Rebaza told Reuters: "The idea is that the purchase (of ELSA) will be followed by the integration of the two companies (ELSA and Lindley). This year will be basically focused on that objective, so that next year they can take off, completely integrated."

Lindley and ELSA will decide whether to go ahead with the merger after Lindley's offer for the 13% of ELSA shares that are publicly traded is completed, Rebaza said. This is expected to happen some time this week. The share purchase will allow Lindley to almost double its share of the Peruvian soft drink market to 64%.

Coke already holds a minority share in Lindley, which it bought in 1999, and owns half the rights to the Inca Kola brand. Earlier this year, Lindley paid around US$130m to buy an 80% stake in ELSA from Embonor, the company that bottles Coca-Cola in Chile.

Rebaza told Reuters that the merger of bottling operations is more part of a drive for efficiency and less a reaction to the fierce growth of competitors in Peru such as Kola Real.