Business

Coca-Cola to follow its rival Pepsi bottling steps
by Zivka Deleva

The biggest and most popular beverage producer in the world “Coca-Cola Co.” is seriously thinking to buy the largest bottler companies that in decades work separately than the production sector, informs an anonymous source. So it doesn’t have to mean that that would happen! This step was initiated by “Coca-Cola Co.” biggest rival, that did the same in April, last year. The reason for this step was the fall of the soda sales, and the companies had to have more control over costs and the distribution of the drinks. For more than 110 years, this company had a strategy to make only the syrup concentrate and then sell it to bottlers all over the wo! rld that have bought its franchise. Actually, the bottlers produce the final product, add filtered water and sweeteners, than sell, distribute and merchandise the product. There still isn’t an agreement on paper, but there are rumors that “Coca-Cola Co.” is planning to spend $15 billion. That means that it would buy “Coca-Cola Enterprises Inc's ” North American operations. As the other bottlers are concerned, they are going to continue the same model of work. The other operations of “Coca-Cola Enterprises Inc's are going to stay independent, like the ones in Scandinavia and Germany. For NA operations, bottling coke is the 70 percent of its net revenue last year. This might be a dangerous step for the biggest beverage company. “Coke” is the largest shareholder of “Coca-Cola Enterprises”, with 35 percent stake. Few months ago, its rival “PepsiCo Inc” did the same thing and it was only a question of time! when would Coke producer will imitate this step. Lots of expe! rt say t hat this is not what Coca Cola really wanted to, but it was pushed by its rival, and has follow the “evolving nature of U.S soft drink market”. "This is a tit-for-tat business. They're responding. This is something that they've been publicly committed to not doing. It's something they're getting pulled into." – says Tom Pirko, founding partner of beverage industry consultants Bevmark LLC.

by Zivka Deleva for SigEx Ventures (http://sigexventures.com)

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posted by Blog TechSource @ 1:33 AM