Mexican shopkeeper wins her own cola war
Coca-Cola faces $68M in fines Company tried to stifle competition
MEXICO CITY—
It might be “ the real thing,” but no one tells shopkeeper Raquel Chavez that Coke is the only thing she can sell at her one- room store in an impoverished Mexico City neighbourhood. So when they tried, the fasttalking Chavez, who put three children through college with 20- hour days behind the counter, was up for a fight. Now Mexico has imposed its biggest ever anti- monopoly fines — $68 million (U.S.) — against Coca- Cola and dozens of its distributors and bottlers. And in a country where Davidvs.Goliath battles usually end with David getting crushed, Chavez’s victory is no small feat. The fines won’t be formally announced until an appeals period ends, but regulators and CocaCola confirmed them to AP.
It is no coincidence that the battle — which resulted in some of the highest antitrust fines Coke has ever faced — was waged in Mexico, with the highest per- capita soft drink consumption in the world. Even Chavez expected to lose when a Coke distributor told her to get rid of Big Cola, an upstart brand recently arrived in Mexico from Peru, or risk having Coke stop selling to her.
“ I told them, ‘ You can’t refuse to sell to me. That’s unconstitutional’,” said Chavez, 49. “ I didn’t really know if it was . . . but I said it anyway.”
Coke, whose share of the Mexican soft drink market hovers around 70 per cent, is a musthave item for small stores. 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.
Coca-Cola denied 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.” Chavez won’t get any of the money — the fines go to the government.
In 2003, her customers in the working- class Iztapalapa neighbourhood started asking for Big Cola, which had begun cutting into Coke’s market with lower prices. Coke told her to get rid of the brand. She refused.
“ I am a common citizen who demands her rights, who won’t allow herself to be stepped on, that’s all,” said Chavez, sitting on an upturned Coke crate outside her store, where counters are protected against thieves with steel mesh. Doing business here is tough, but nothing had prepared Chavez for the fight with Coca- Cola.
First, she didn’t know which government agency to turn to. Then, Chavez found the Federal Competition Commission offices on the swanky west side of town. After two months of inaction, she blew up at the antimonopoly agency, demanding to know: “ Are you here to protect Coke, or to defend us?” They finally accepted her complaint, investigated it, and found evidence of similar incidents — some documented by Big Cola, which later joined the case. Two years later, on July 4, the commission ruled in a closed- door session that 15 Coke bottlers had violated anti- monopoly laws in the case, and fined them about $ 15 million. On Aug. 12, a similar case that had been held up in hearings for years was suddenly resolved. This time, 54 Coke distributors were ordered to pay about $ 1 million each. Some distributors had threatened to remove company- supplied refrigerators and displays from shops that sold other brands, according to one of the rulings obtained by AP.
For three months, Chavez lost all her Coke deliveries. She was forced to buy from wholesale centres and lug home dozens of cases in her 1979 Dodge Dart. “My husband just watched me,” she said. “ He was mad.” Things have changed since those dark days. Her husband now waits on customers as Chavez proudly shows off her court papers. Almost on cue, a bright red Coke truck pulls up and smiling, courteous Coke employees unload Chavez’s twice- weekly delivery. They say she’s a good customer.