Coca-Cola to build Peruvian distribution

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LIMA -- Coca-Cola is expecting to widen its distribution throughout Peru - scene of a fierce battle with local market leader Inka Cola - on the back of increased investment in its local producer, the Latin American Bottling Company.

The U.K.'s Inchcape group, which has controlled 30% of the bottling company since 1996, has announced it will invest an additional $68 million dollars, upping its share to 51%.

Jaime Silva, Latin American Bottling Company's administrator, says the objective is to increase the company's market share by between 70% and 75% over the next four years. Silva says the fresh capital means Coca-Cola will be able to expand its presence in nearly all of Peru.

However, the company faces stiff competition in its effort to conquer Peru. Local brand Inca Kola continues to lead the beverage market with around a 33% share. Coca-Cola is right behind with 31%, having increased its share throughout the year, and Pepsi-Cola is in third place with 12.7%.

But Inca Kola does not plan to sit back and watch Coca-Cola expand. At the end of this month, its maker, the Jose R. Lindley Corporation, plans to re-launch Bimbo Kola. The fruity cola - Bimbo comes in flavors such as strawberry and pineapple - has been floundering for years, but Inca Kola's President Johnny Lindley says market studies have shown that Peruvians will go for the relaunched brand.

"We are going to re-launch every flavor separately over the next few months," he says. "We are confident that people will go for Bimbo again."

But both Coca-Cola and Inca Kola will have to convince Peruvians to drink more soda if they plan on meeting their growth targets.

Peru currently has the lowest per capita consumption of soft drinks in Latin America, consuming less than 100 eight-ounce bottles a year per capita. In Mexico, the number is 528 eight-ounce bottles per capita and in neighboring Chile, 365 bottles.

"Our country has one of the lowest consumption rates in the region but with the economy improving, this should change," Lindley says. "We predict sustained growth in the industry for the coming years."

Copyright November 1997, Crain Communications Inc.

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