Mexico anti-trust

If there were any doubts that Mexico is getting serious about fostering greater competition in the country, the move on Thursday by its trust-buster to block US paint maker Sherwin-Williams’ $2.34bn bid for local rival Consorico Comex, should have laid them to rest.

The deal, the largest US-Mexico transaction in nearly a decade, would have doubled Sherwin-Williams’s sales in Latin America and make it one of the world’s biggest makers of architectural paints. 

Rarely can a restaurant patron in Mexico choose between beers from the country’s biggest brewers, Grupo Modelo or Femsa Cerveza, let alone an imported beer or micro-brewery offerings.

The menu will almost certainly be devoted to either Modelo’s brews, or Femsa’s. But that business model is about to change – albeit gradually. 

Mexico’s trust-busters are sometimes regarded as a rather toothless bunch. The concentration of markets as disparate as beer, television and telephony appears to prove the thesis. But the problem often lies not with the trust-busters – officially known as the Federal Competition Commission – but with a legal system that makes prevarication into a fine art.

That the commission does have real teeth was shown on Tuesday by its decision to reject Nestlé´s takeover of Pfizer’s baby foods business in Mexico because it would give it too big a share of the nation’s market, hence giving it a free hand to raise prices.