Rocking the Mexico beer boat

By: Chris Mercer - 10 August 2010 15:26

There are going to be a few sleepless nights for Heineken and Anheuser-Busch InBev's respective affiliate brewers in Mexico, FEMSA Cerveza and Grupo Modelo, over the next four months.

That's because Mexican competition officials are once again investigating whether the two firms' stranglehold on the country's beer market is being maintained by "monopolistic practices".

If you listen to the analysts, exclusive supply deals with independent retailers - which lie at the heart of this case - are an open secret on Mexico's beer market. There have been several previous investigations that have fallen apart.

This time, however, complainant SABMiller thinks its chances of success are higher. There has been a notable change of attitude on competition policy at the highest level in Mexican Government. President Calderon recently introduced fresh legislation to tighten up the rules and give the competition authority, Cofeco, more power.

That said, even should Cofeco change the rules, SABMiller would face a very tall order to build share in a market so powerfully dominated by two other players.