Coke hit with $93m fine

The biggest anti-monopoly fines ever issued in Mexico signals a departure for a country where such battles usually favour the big players.

Raquel Chavez’s victory is no small feat. Mexico boasts the highest per-capita soft drink consumption in the world and the fine amount to some of the biggest anti-trust infringements Coke has ever faced.

The fines – one batch amounting to about A$20 million and another for A$72 million – will not be formally announced until a mandatory appeals period ends, but regulators and a Coca Cola representative confirmed them to The Associated Press.

Even Chavez, 49, expected to lose when a Coke distributor told her to get rid of Big Cola, an upstart brand that arrived in Mexico recently from Peru, or risk having Coke stop selling to her.

“I told them, ‘You can’t refuse to sell to me. That’s unconstitutional’,” Chavez told The Associated Press. “I didn’t really know if it was unconstitutional, but I said it anyway.”

Coca Cola denied that it has engaged in monopolistic practices.
“We respect the … decisions,” spokesman Charley Sutlive said. “However, we have used the appeal processes open to us to present arguments that our business practices comply with Mexican competition laws, and to demonstrate that our commercial practices are fair.”

With a share of about 70 percent of the Mexican market, Coke is a must-have item for small stores and Chavez still sells it. But she also resented being told what she could sell.

“You may call the shots everywhere else, but I’m the boss in my store,” she told the distributor.

Mrs Chavez approached the Federal Competition Commission but her complaint remained unanswered after two months, when she exploded at the anti-monopoly agency.

“I told them, ‘What are you good for? What purpose do you serve?'” she said. “Are you here to protect Coke, or to defend us?”

They finally accepted her complaint, finding evidence of similar incidents – some documented by Big Cola.

Two years later the commission ruled that 15 Coke bottlers had violated anti-monopoly laws in the case, and fined them about A$20 million.

Just a few weeks later, on August 12, a similar case that had been held up in hearings for years was suddenly resolved – again, with a ruling against Coke, this time against 54 distributors who were ordered to pay about A$1.4 million each, the maximum fine allowed.

Mrs Chavez won’t get any of the money – the fines go to the government.