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BRAZIL: Pepsi challenges Coke over Brazil tea buy

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PepsiCo is looking to block The Coca-Cola Co.'s purchase of a tea producer in Brazil.

The US company has said that it believes Coca-Cola's proposed buy of Leao Junior would create "a larger concentration in the tea industry", Dow Jones cited a company official saying yesterday (2 April).

"We have appealed to the Brazilian Consumer Affairs Division, or SDE, to see all documents presented by Coca-Cola regarding this acquisition. From my point of view, there will be a larger concentration in the tea industry with the acquisition, which is terrible for the consumer," Jose Talarico, vice president of Pepsi's legal department in Brazil and Latin America, told the new service.

Coca-Cola confirmed its intention to buy Leao Junior, which produces the Matte Leao RTD tea brand, last month for an undisclosed fee. But Pepsi is concerned that the acquisition will make Coca-Cola by far the leading player in the RTD tea market in the country. Matte Leao accounted for 45.7% of the market last year, while Nestea, which Coca-Cola jointly owns with Nestlé, held 24.4%.

"A final decision on the deal should be made by Cade (the Justice Ministry's Antitrust Division)," Talarico told the news service. "I expect a decision in the next six to 12 months, but we are preparing for a legal battle."

When contacted by just-drinks today, a spokesperson for PepsiCo confirmed the move, but would not be drawn further on the reports.


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