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Latino Daily News

Friday July 12, 2013

Mexico’s Largest Brewers Must Limit Exclusivity Deals

Mexico’s Largest Brewers Must Limit Exclusivity Deals

Photo: Grupo Modelo

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Mexico’s two largest brewers, Grupo Modelo and Cuauhtemoc Moctezuma, reached an agreement with the country’s competition regulator that limits the exclusivity deals they have with clients to no more than 25 percent of their respective points of sale.

That percentage will have to be gradually lowered to 20 percent by 2018, the Federal Competition Commission, or CFC, said in a statement Thursday.

Under the terms of the agreement, Mexican craft beers must be allowed “open and unrestricted” access in all restaurants, bars and cantinas nationwide, the CFC added.

Failure of either brewer to abide by the new rules, including putting the exclusivity deals in writing, will result in a fine equivalent to 8 percent of the company’s annual domestic sales.

Modelo, which is owned by Anheuser Busch InBev, the leading global brewer; and Cuauhtemoc, a unit of Heineken, have a virtual duopoly on the Mexican beer market.

The world’s No. 2 brewer by revenues, SAB Miller, which has struggled to make inroads in Mexico, and several craft brewers had lodged a complaint with the CFC about the exclusivity deals.

The CFC said Thursday it had closed its “investigation into monopolistic practices” after securing the commitments from Modelo and Cuauhtemoc.