Brazilian beer giant may be forced to sell top brand

BRASILIA--Brazilian beverage company Companhia de Bebidas das Americas AmBev, the union of rival beer and soft drink giants Brahma and Antarctica, may be forced to sell one of its top beer brands in order to have its merger approved by anti-monopoly body CADE, the Administrative Council of Economic Defense.

Earlier, it seemed the government was prepared to overlook the virtual monopoly created by AmBev to allow a Brazilian beverage marketer to be able to compete globally. AmBev controls 80% of Brazilian beer sales and 39% of the soft drink market.

CADE has now suggested that AmBev sell its prized Skol brand. The company's official response has been to dismiss the suggestion, arguing that, without Skol, Brahma will become smaller than it was prior to the merger.

"The disappearance of the Skol brand represents the closing of 160 independent selling points with 16,000 employees, and that is not acceptable," says Victorio Carlos De Marchi, one of AmBev's presidents.

Copyright November 1999, Crain Communications Inc.