Magazine article SourceMex Economic News & Analysis on Mexico

Supreme Court Rulings against Coca-Cola, Ford Reinforce Right of Mexican Government to Protect Public Interest

Magazine article SourceMex Economic News & Analysis on Mexico

Supreme Court Rulings against Coca-Cola, Ford Reinforce Right of Mexican Government to Protect Public Interest

Article excerpt

In two decisions in late October, Mexico's high court (Suprema Corte de Justicia de la Nacion, SCJN) issued rulings against Mexican subsidiaries of Coca-Cola and Ford, reinforcing the right of the Mexican government to protect the public interest. In the case of Coca-Cola, the high court upheld a ruling from the anti-trust agency Comision Federal de Competencia (CFC) that eight bottling companies affiliated with the US-based multinational company had engaged in monopolistic practices. The court also ruled that Ford Motor Co. must return more than 657 million pesos (US$61 million) in taxes that were erroneously refunded to the company in 1997.

SCJN says anti-monopoly agency was correct in going after Coca-Cola

The court's ruling in the Coca-Cola case upholds the right of the CFC to enforce Mexico's anti-monopoly laws. The eight bottling companies, which include Propimex, Embotelladora la Victoria, The Coca-Cola Export Corp., Yoli de Acapulco, Industria Refresquera Penínsular, Embotelladora Zapopan, Coca-Cola Femsa, and Panamco Bajio, had filed legal action against the CFC after the commission imposed fines against the Coca-Cola affiliates for engaging in practices that stifled competition from other bottling companies, namely Pepsico and Big Cola. In their lawsuit, the eight companies were seeking the return of 94 million pesos (US$8.8 million) in fines levied by the CFC.

In their decision, the five SJCN judges who handled the case cited Article 28 of the Mexican Constitution, which, in combination with the Ley Federal de Competencia, seeks to prevent, detect, and sanction any monopolistic practices in order to protect the interest of the public.

The judges rejected arguments from the plaintiffs that the law is not clear on the definition of monopolistic practices. "Legislators established sufficient criteria to allow a clear interpretation [of the anti-monopoly law]," the justices said.

While the SJCN ruling applies to soft drinks and bottled water, Coca-Cola continues to expand its presence in other areas of the Mexican beverage market. …

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