just On Call - Coca-Cola Co boss dismisses China bump
Coca-Cola saw China Q4 volumes drop
The boss of The Coca-Cola Co has said a transition in China's economy, causing a slowdown, will in fact deliver long-term benefits for the group.
Coca-Cola chairman & CEO, Muhtar Kent, said in an analyst call today (12 February) that China is dragging as it moves from an export-led economy to one more balanced with consumer spending. “I think there were challenges in that transition initially ... but I think long-term it's going to be very beneficial for everyone,” Kent said.
In full-year results reported today, Coca-Cola saw Q4 volumes in China fall by 4%, though Kent said full-year volumes were still in mid-single digit growth. "We still expect the ongoing uncertainty in China to have a short-term impact on our industry and on our business," Kent said. He also blamed bad weather, a tough comparison from last year and a later Chinese New Year for the volumes drop.
In Japan, Coca-Cola's Q4 volumes were down by 4%, and Kent warned that consumer sentiment will continue to be “muddled and volatile” in the country.
Meanwhile, recent changes in Coca-Cola's relationship with its bottlers are “not seismic” but helping to keep the company's distribution network nimble and flexible, Kent said. He also said that moves such as Coca-Cola FEMSA's acquisition of a bottler in the Philippines and the planned merger of four Tokyo bottlers are “pro-active, not reactionary”.
A report last month claimed recent bottler M&A activity signals a new wave of refranchising for the year ahead.
Coca-Cola Co's chief executive Muhtar Kent has argued that the group's second quarter performance is an "anomaly" caused by a combination of uncontrollable factors and not a "systemic" issue. ...
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