Coca-Cola Femsa SAB de CV was organized on October 30, 1991. The Company is a franchise bottler of Coca-Cola trademark beverages. It operates in Mexico, Central America, Colombia, Venezuela, Brazil, Argentina and the Philippines. It is a subsidiary of FEMSA, which is a brewer and a convenience store chain in Mexico. The Company produces, markets, and distributes Coca-Cola trademark beverages and brands licensed from FEMSA. It has aggregated operating segments into the following reporting segments: Mexico & Central America division and the South America division. The Coca-Cola trademark beverages include: sparkling beverages such as colas and flavored sparkling beverages, waters, and still beverages including juice drinks, coffee, teas, milk, value-added dairy and isotonic drinks. Its brand is Coca-Cola and its line extensions, Coca-Cola light, Coca-Cola Zero and Coca-Cola light caffeine free. Other main brands include Ciel, Fanta, Sprite, Lift and Fresca. The Company produces, markets, and distributes Coca-Cola trademark beverages in each of its territories in containers authorized by The Coca-Cola Company, which consist of a number of returnable and non-returnable presentations in the form of glass bottles, cans and plastic bottles made of polyethylene terephtalate, which it refers to as PET. The Company uses the term presentation to refer to the packaging unit in which it sells its products. Presentation sizes for its Coca-Cola trademark beverages range from a 6.5 -ounce personal size to a 3-liter multiple serving size. For all of its products excluding water, it considers a multiple serving size as equal to or larger than 1.0 liter. In general, personal sizes have a higher price per unit case as compared to multiple serving sizes. In addition, the Company sells some Coca-Cola trademark beverage syrups in containers designed for soda fountain use, which it refers to as fountain. It also sells bottled water products in bulk sizes, which refer to presentations equal to or larger than 5 liters, which have a much lower average price per unit case than its other beverage products. The Company faces competition from other bottlers of sparkling beverages such as Pepsi products, and from producers of low cost beverages or B brands. It also competes against beverages other than sparkling beverages such as water, fruit juice and sport drinks. The Company's main competitor in Mexico is The Pepsi Bottling Group, or PBG. Its main competition in the juice category in Mexico is Jumex, juice producer in the country. In the water category, Bonafont, a water brand owned by Grupo Danone, is its main competition. In Brazil and Argentina, the Company competes with Companhia de Bebidas das Americas, commonly referred to as Ambev, the brewer in Latin America and a subsidiary of InBev S.A., which sells Pepsi products in addition to a portfolio that includes local brands with flavors such as guarana and proprietary beers. The Company is subject to regulation in each of the territories in which it operates.
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