Big Mexican brewers forced to open local beer market
By Elinor Comlay and Luc Cohen
MEXICO CITY (Reuters) - Mexico's biggest brewers, Corona maker Grupo Modelo and Sol producer Cuauhtemoc Moctezuma, have agreed to face more competition to end a dispute over their long domination of the domestic beer market, the world's sixth-biggest.
Mexico's Federal Competition Commission (Cofeco) said on Thursday that Modelo, a unit of Anheuser-Busch InBev SA ABI.BR, and Cuauhtemoc, which belongs to Heineken NV HEIN.AS, would in the next five years have to reduce exclusivity deals they have with clients in Mexico or face heavy fines.
The directive follows a longstanding complaint from rival SABMiller SAB.L, which has struggled to make headway selling its brands in Mexico.
A spokesman for SABMiller, whose brands include Miller, Grolsch and Peroni, declined to comment, though analysts said the decision would help it in Mexico.
In terms of the amount of beer consumed, Modelo accounted for some 56 percent of the Mexican market in 2012, with Heineken Mexico at 43 percent, data from market research firm Euromonitor shows. SABMiller was a distant third with 0.3 percent.
The two brewing giants agreed to conditions that include limiting exclusivity deals in convenience stores and restaurants to a maximum of 25 percent of points of sale, reducing this to 20 percent over the next five years.
In addition, no such agreements may exclude sales of artisanal beer brewed by small-scale beer makers, Cofeco said.
The watchdog also set a penalty for breaking the terms of the agreement at up to 8 percent of Cuauhtemoc's or Modelo's annual Mexican revenue. Continued...