Arca Seals Coca-Cola Acquisition But Economic Backdrop Looks Shaky

Mexico-based Coca-Cola bottler Embotelladoras Arca has announced the successful conclusion of its purchase of a Coca-Cola franchise for the north-western region of Argentina. The deal, first announced in March 2008, highlights the firm's commitment to Argentina and can be viewed in light of the rapid increase in consumption of soft drinks in the country, which compares with growing signs of market maturity in Arca's Mexican home market. However, the possibility of a sharp reduction in consumption must be factored into any purchase due to the economic risks associated with Argentina's idiosyncratic economic policies, risks which have worsened since the deal

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