MEXICO: SABMiller attacks beer market ruling

By | 12 July 2013

SABMillers Mexican subsidiary has been left unimpressed by the outcome

SABMiller's Mexican subsidiary has been left unimpressed by the outcome

SABMiller subsidiary, Miller Trading Company, has hit out at Mexico's competition authorities arguing its settlement with two rival brewers does not go far enough and still leaves the country's beer market “anti-competitive”. 

The Mexican Federal Trade Commission (Comisión Federal de Competencia - CFC) said yesterday (11 July) it had approved a range of commitments made by market leaders Heineken-owned Cuauhtémoc Moctezuma and Anheuser-Busch InBev-owned Grupo Modelo, following a three-year investigation. The review was triggered by SABMiller's subsidiary lodging a complaint of abuse in Mexico's beer market in 2010

But in a strongly-worded reaction, Miller Trading Company attacked yesterday's announcement and hinted it may take further action.

In a statement, it said that “the CFC and the two dominant brewers did not go far enough to materially change the conditions for access to the beer market and for real competition”. 

It added: “Given that some retailers are very large and many others very small, it will be possible to restrict beer sales to a much greater extent than reflected in the exclusivity commitments, and therefore the existing anti-competitive situation will be allowed to persist to a material extent."

The company also voiced surprise that smaller brewers would now be allowed access to “exclusive on-trade accounts”, but that “the dominant brewers could continue to block Miller Trading Company and other importers from these accounts”. 

Armando Valenzuela, Miller Trading Company's general director, said: "This settlement demonstrates that both parties recognise that their exclusivities constitute anti-competitive practices with negative effect on both consumers and competitors.  

“Unfortunately, the CFC found it appropriate to still allow exclusivities and, surprisingly, allowed continued discrimination against Miller’s brands. A complete opening of the market in Mexico would have been better for consumers, retailers, importers, other local brewers and investors."

He added: “We are analysing the settlement resolution and will determine our appropriate response in due course."

Heineken's Moctezuma said it was "pleased" the committments had been agreed, while Modelo said the closing of the case gives brewers, customers and consumers "certainty going forward".

To see just-drinks' full coverage of the legal wrangling in Mexico, click here.

Expert analysis

Beer in Mexico

Beer in Mexico industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2007-11, and forecast to 2016). The profile also contains descriptions of the leading players including key financial metrics and analysis of competitive pressures within the market. Essential resource for top-line data and analysis covering the Mexico beer market. Includes market size and segmentation data, textual and graphical analysis of market growth trends, leading companies and macroeconomic information.

Sectors: Beer & cider

Companies: SABMiller, Heineken, Modelo, Anheuser-Busch InBev

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