Coca-Cola Amatil has denied that its joint-venture with brewer SABMiller is close to ending

Coca-Cola Amatil has denied that its joint-venture with brewer SABMiller is close to ending

Coca-Cola Amatil (CCA) has denied that its joint-venture with brewer SABMiller is close to ending, pending a possible takeover bid by SABMiller for Foster's' Australian beer arm.

Reports last month suggested that CCA and SABMiller have reached an in-principle agreement to dissolve their Pacific Beverages partnership, should SABMiller seek to buy out Foster's' Carlton & United Breweries (CUB) business.

SABMiller has said it is interested in CUB, the biggest brewer in Australia, given that Foster's is planning to demerge its beer and wine businesses in the first half of this year.

However, speaking to analysts on an earnings call today (23 February), CCA's group managing director, Terry Davis, said that there has been no change to the arrangement with SABMiller.

"As you know, there are certain investment bankers in this country that like to beat up stories," Davis said. "There are no changes and there have been no changes to our joint-venture arrangement with SABMiller, full-stop. So those investment bankers that are trying to beat up some business, we've seen that not just this year but in previous years, good luck to them.

"In terms of what we do in the marketplace, we look forward to our alcohol business growth for years to come, and I can tell you that we are very very very comfortable with our joint-venture agreement terms," he added.

CCA's share price climbed by AUD0.31 to AUD11.68 at close of trading in Australia today. The company this morning recorded an increase in full-year profits, despite cooler and wetter weather conditions during the second half of the year.

The firm earned AUD$497.3m (US$499.1m) in 2010, a 10.8% increase on the prior year. EBIT climbed by 7.3% to AUD844.9m.

Managing director for Australasia, Warwick White, assured analysts that the group is continuing to see growth in soft drinks, despite the poor weather conditions.

"I don't think we're seeing any material change to the underlying trend," White said. "We got off to a solid start in January and February across the other states where we haven't had the Queensland position, despite the fact that Victoria had the wettest summer ever. So there is an underlying trend of low-growth but growth in the soft drinks business."

White said the firm had not given earnings or sales forecasts for the first-half as a result of uncertainty in the industry.

"There is a lot of uncertainty over what the level of consumer spending is over the first half, and whilst we're saying we've had a good start to the year, there is still a lot of uncertainty there," White said. "So we're just not comfortable in predicting....we could be right on the upside and we could be wrong on the downside. We just don't want to make it too far one way or too far the other."