Coca-Cola Femsa SAB, the world’s biggest franchised bottler of the soft drink, sank to a seven-week low on concern Mexico’s junk food tax is making sugary drinks more expensive.
The shares fell 1.8 percent to 151.10 pesos at the close of trading in Mexico City, the lowest since Nov. 26. The stock has declined 23 percent in the past year. The benchmark IPC index climbed 0.7 percent today.
The 1 peso per liter levy on sugary drinks that took effect Jan. 1 increases the price 13 to 14 percent, said Karla Miranda, an analyst at Corporativo GBM SAB in Mexico City, who expects the stock to be volatile until the company releases earnings. Femsa draws about 40 percent of its revenue from Mexico.
“Bottling is going to be more expensive,” Miranda said. “The market is really nervous about what the outcome will be regarding results.”
Arca Continential SAB, Latin America’s second biggest bottler of Coca-Cola, fell 1.8 percent to 76.80 in Mexico City trading, the lowest level on a closing basis since Nov. 19.
Coca-Cola Femsa yesterday sold $150 million more in 10-year bonds and $200 million more in 30-year bonds on Monday in part to repay outstanding debt.