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ECONOMY | 21-02-2019 11:22

Coca-Cola FEMSA files for crisis prevention proceedings

Sales dropped 9.9 percent in Argentina over the course of 2018, reports Mexican multinational bottler of world-famous soft drink.

Coca-Cola bottler FEMSA, the Mexican firm responsible for bottling the famous soft drink and other beverages in Argentina, requested Wednesday that it be allowed to file crisis prevention proceedings, after a sharp drop in sales and profits. 

Entering crisis prevention proceedings would allow the firm to reduce costs and personnel, with lay-offs likely to follow a slowdown in consumption.

"Today the first meeting was held where representatives of FEMSA presented about the situation of the company in the country," a source from the Ministry of Production told Télam. Another meeting is scheduled on Friday to continue negotiations, the source said.

Companies are required to submit a crisis prevention procedure when they plan to reduce employment by more than 15 percent in plants with fewer than 400 employees, more than 10 percent of facilities with between 400 and a thousand workers, or more than 5 percent of the personnel in companies of more than one thousand.

FEMSA has two plants in Argentina, and the proposed crisis procedure would only affect the one located in Buenos Aires.

The company claimed that "it is in a complex stage due to the slowdown in consumption, which means that it needs to readjust its employment structure," when explaining talks with Argentina to the press.

FEMSA, a Mexican multinational bottling company, has been based in Argentina since 1994 and is one of the four bottlers that Coca-Cola Company has in this country.

According to the Scentia consulting group, the country's soft drink sales saw a huge drop January, with a year-on-year decrease of 14.1 percent. The company's fell a total of 9.9 percent in Argentina throughout 2018, the group reported.

The Waters and Soft Drinks branch of the Truckers' Union declared itself in "state of alert" and accused the company of "presenting a false crisis preventive state".

Other large companies such as the Carrefour supermarkets, tire manufacturer FATE and airline Avianca Argentina have submitted requests for crisis procedures to reduce staff at a lower costs in the country.

-TIMES/AFP

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