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Mexico fines Coke, bottlers:
Pepsi's antitrust complaint brings $54 million levy

By CAROLINE WILBERT
Issue: 8/18/05
Atlanta Journal-Constitution

Mexico's antitrust commission has hit Coca-Cola and its bottlers with a $54 million fine in response to 5-year-old complaints by rival Pepsico that it used exclusive deals with stores to shut out competitors.

If it sticks, the fine would be one of the largest ever levied against the Coke system for anti-competitive violations.

Coke said it plans to appeal. If the company loses, it will be responsible for about $1 million of the fine. Six bottlers are responsible for the rest, and each would decide on its own whether to appeal, said Coke spokesman Ben Deutsch.

Pepsi's complaints in Mexico, which Coke has repeatedly denied, were first registered in 2000.

In February 2002, the country's La Comision Federal de Competencia ruled against Coke. However, that ruling was overturned because of a procedural issue. The most recent ruling and fine, which were issued Friday, stemmed from the second investigation.

In a statement, Coke said: "We respect the FCC's decision. However, we plan to use 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, foster efficiency in the marketplace and promote a free, competitive environment."

In a separate case, Coke and some of its bottlers have been ordered to pay a fine in Mexico for anti-competitive practices related to a dispute with the maker of a local drink called Big Cola.

Coke is also appealing that fine, which is $22 million in total. Similarly, Coke itself would be responsible for $1 million, while five bottlers would be responsible for the rest, according to Deutsch.

The Coke system has faced similar issues before. It paid a $16 million fine issued by Italy in 1999.

Last year Coke agreed to stop some disputed business practices in the European Union and did not have to pay a fine.

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