MEXICO CITY, July 17 Arca Continental, Latin
America's No. 2 Coke bottler, said on Thursday its
second-quarter profit rose 3 percent, as cost-cutting helped
offset a drop in sales caused by a tax on sugary drinks.
The company reported a profit of 1.935 billion pesos
($144 million), compared to 1.878 billion pesos in the
Arca said the volume of drinks it sold fell 3.3 percent, but
price increases helped revenue rise by 0.8 percent to 15.958
Sales of fizzy drinks in Mexico have slumped this year since
the government introduced junk-food and sugary drinks taxes that
have raised prices for consumers.
Arca's rival, Coca Cola Femsa, has said it expects
sales volumes in Mexico to drop between 5 and 7 percent this
year as a result of a tax of 1 peso (8 cents) a liter on sugary
But Arca's report showed that sales volumes of all drinks,
including water, were down from the year-earlier period,
reflecting weak consumer spending in Mexico.
Mexico's central bank has cut interest rates to a record low
of 3 percent, but its board members warned last week that
domestic spending "still hasn't shown clear signals of
Shares in Arca Continental closed at 88.55 pesos on
Wednesday. The shares are up 8.5 percent since the beginning of
($1 = 12.9865 pesos at end June)
(Reporting by Elinor Comlay; Editing by Paul Simao)