10 August 2000

A broadscale investigation into the marketing and sales practices of Coca-Cola in the Mexican market – its largest outside the US – is expected to be announced in the next few days. The probe, insiders say, has been triggered by a complaint from Pepsico, Coke’s main competitor across the globe.

The inquiry is expected to follow along similar lines to that currently being conducted by the European Commission and will examine practices such as Coke's exclusivity agreements with a wide range of Mexican retailers.

It also coincides with an appeal by Coca-Cola against the way in which Mexican regulators define its market strength. The company will ague to the Mexican Supreme Court that a definition used by the antitrust commission when considering Coke's proposal [now abandoned] to buy Cadbury Schweppes’ Mexican brands was too narrow.

Its market share, Coke maintains, should be measured against a broad beverage market that includes waters and juices rather than only carbonated soft drinks – a sector in which Coke holds a 68% share, according to industry publication Beverage Digest.

News source: Wall Street Journal