SABMiller not fobbed off by antitrust ruling

Sometimes obstinacy will be rewarded. That’s why SABMiller has decided to take its case against the exclusive sales agreement between Mexico’s duopolist brewers and retailers to the next judicial level. The brewer said in early August 2013 that a Mexican federal court has accepted its case to consider overruling a July antitrust settlement on exclusive sales agreements that SABMiller believes "failed to truly address the monopolistic activities" in the Mexican beer market.

Instead of clamping down on the practice, as SABMiller had hoped, Mexico’s Federal Competition Commission reached a pussy-footed agreement with top brewers AB-InBev, the new owner of Grupo Modelo and Heineken’s Cerveceria FEMSA which will limit their use of exclusivity contracts with small shops and some other points of sale, such as restaurants.

The Mexican beer market is the world’s fifth biggest by volume sales and SABMiller claims a miniscule market share. Modelo brands, including Corona, account for about 58 percent of the 67 million hl of beer sold each year, while Cerveceria FEMSA brands like Tecate represent 41 percent.

"The commitments made by both brewers are limited by several significant exclusions, which still make it possible to deny access to a majority of retail sales and to large and important regions," SABMiller said in a statement.

The antitrust agreement will remain in effect while the federal court examines SABMiller’s case, the brewer said.

Nearly half the beer sold in Mexico each year is channelled through small mom-and-pop convenience stores, many of which agree to only offer either Modelo or FEMSA brands in exchange for marketing kit or refrigerators, as well as discounts on beer purchases, credit or assistance with local permits.

In its July resolution, the antitrust authority said that such agreements can make the Mexican retail chain more efficient, for instance by supplying small businesses with financing for improvements and expansion.