Less obvious is the threat the merger of Brahma and Antarctica poses to Coke. Because Brazilians are unusual in their cultural approach to beer -- that it's a soft drink that just happens to be alcoholic -- the most successful beverage sellers here are those that distribute soda and suds together. That is something, critics say, the image-conscious Coke has failed to grasp fully, at the cost of market share.

Many believe Coke has the ability to meet the AmBev threat. However, to do so, some analysts say, it will need to fight fire with beer. That strategy is already working with great success for Coke bottler Spaipa SA in the southern Brazilian city of Curitiba. There, Spaipa has fought to win a more than 50% market share for Kaiser. That success has allowed it to avoid having to offer the kind of discounts for Coke products seen elsewhere in...
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