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MEXICO: SABMiller complaint sparks beer monopoly probe

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SABMiller has sparked a fresh Government investigation into "monopolistic practices" in Mexico's beer industry, but analysts believe the move is unlikely to damage leading brewers FEMSA Cerveza and Grupo Modelo.

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Mexico's antitrust body, Cofeco, said yesterday (9 August) that it would probe the country's beer distribution and sales practices following allegations of abuse. Cofeco declined to name any defendants in the inquiry, which could last up to 120 days.

SABMiller confirmed to just-drinks today that its local subsidiary, Miller Trading Company, and two affiliate distributors filed the complaint. The brewer said that "current practice restricts its access to the market, limits consumer choice and stifles competition in contravention of Mexico's competition laws".

Cofeco said it would investigate practices to "displace" certain players from the market. It will also examine whether certain retailers get special discounts from the leading brewers, Heineken-owned FEMSA Cerveza and Modelo, in exchange for distribution exclusivity.

However, several analysts were sceptical about the inquiry. "The government has launched these investigations many times before and they've never had much of an impact," one senior analyst, asking not to be named, told just-drinks.

Deutsche Bank analysts said that exclusivity contracts were “entrenched” in market culture. They said SABMiller has "for several years tried to break into Mexico and has on previous occasions presented similar complaints”. Analysts said SABMiller may be “testing the waters” to see if Cofeco has a different viewpoint now that Heineken has taken control of FEMSA Cerveza.

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


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