Morgan Stanley has lowered its rating on Coca-Cola Femsa (KOF) to underweight as pressure mounts on the soft drinks sector in Mexico.

In a research note Morgan Stanley said: "Despite strong management, the company now faces numerous headwinds: slower category growth in Mexico owing to health and wellness concerns, B-brands, volatile commodity costs and now higher concentrate costs."

On Friday, Coca-Cola FEMSA registered an increase in its consolidated volumes by 3% with growth in Mexico, Brazil, and Colombia compensating for volume declines in Venezuela and Central America. Pressures in raw material costs were offset at the unit, which maintained stable operating margins at 17.3% of total revenues, the company said.