MEXICO: Pepsi complaints of Coke practices grow stronger

By Sarah Diston | 12 September 2000

Since filing a complaint in April against Coca-Cola with the Mexican anti-monopolies watchdog, the Federal Competition Commission, PepsiCo is claiming to have more than 400 signed affidavits from Mexican store owners who claim to have witnessed agreements in which Coke has provided coolers and paid out cash bonuses in exchange for the stores exclusively selling its products.Pepsi and two further local soft drink companies Aga and Mundet are all accusing Coca-Cola of blocking them out of the market through exclusive agreements with retailers. Pepsi is also blaming the tactics used by the world's number one beverage company for its steady decline in market share.Coca-Cola's distribution network of trailers and bicycles reaches more than 900,000 points of sale and market research group, AC Nielsen has said Coca-Cola sales account for 71.5% of Mexico's soft drinks market. In the US the capita consumption of Coke is 100 litres, in the northern Mexican city of Monterrey alone the per capita consumption is 165 litres a year.Joseph Bormann, corporate analyst with Fitch in Chicago said: "Coca-Cola has clearly been able to ingrain itself into the Mexican mentality, it has done a better job reaching the Mom 'n' Pop stores and for many people in Mexico that is the only access they have."Coca-Cola has dropped a court appeal challenging a decision by the Federal Competition Commission stopping a planned merger with Cadbury Schweppes in Mexico. Coca-Cola spokesman Rodrigo Calderon told the press the company has offered to enter into talks with the anti-monopolies watchdog in an attempt to come to a settlement over Pepsi's complaints.

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Since filing a complaint in April against Coca-Cola with the Mexican anti-monopolies watchdog, the Federal Competition Commission, PepsiCo is claiming to have more than 400 signed affidavits from Mexican store owners who claim to have witnessed agreements in which Coke has provided coolers and paid out cash bonuses in exchange for the stores exclusively selling its products.Pepsi and two further local soft drink companies Aga and Mundet are all accusing Coca-Cola of blocking them out of the market through exclusive agreements with retailers. Pepsi is also blaming the tactics used by the world's number one beverage company for its steady decline in market share.Coca-Cola's distribution network of trailers and bicycles reaches more than 900,000 points of sale and market research group, AC Nielsen has said Coca-Cola sales account for 71.5% of Mexico's soft drinks market. In the US the capita consumption of Coke is 100 litres, in the northern Mexican city of Monterrey alone the per capita consumption is 165 litres a year.Joseph Bormann, corporate analyst with Fitch in Chicago said: "Coca-Cola has clearly been able to ingrain itself into the Mexican mentality, it has done a better job reaching the Mom 'n' Pop stores and for many people in Mexico that is the only access they have."Coca-Cola has dropped a court appeal challenging a decision by the Federal Competition Commission stopping a planned merger with Cadbury Schweppes in Mexico. Coca-Cola spokesman Rodrigo Calderon told the press the company has offered to enter into talks with the anti-monopolies watchdog in an attempt to come to a settlement over Pepsi's complaints.

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