US: Coca-Cola Enterprises better equipped than Britvic for rising costs
CCE updated its cost of sales per case outlook for 2011 two weeks ago
Coca-Cola Enterprises (CCE) is better protected against rising commodity costs in Europe than UK soft drinks firm Britvic, analysts have said.
CCE's largest competitor in the UK, Britvic, issued a profit warning yesterday (24 February) due to soaring input costs. Britvic, which bottles PepsiCo drinks in the UK and Ireland, subsequently saw its share price drop by 12% on the London stock exchange.
Rising raw materials costs are a major concern for many soft drinks companies in 2011, with both PepsiCo and Coca-Cola Co already warning of increases at a global level.
Britvic's warning has raised concern about the prospects for CCE in Europe. However, analyst group Stifel Nicolaus said in a note today (25 February) that CCE is likely to fare better.
CCE updated its cost of sales per case outlook for 2011 two weeks ago, sticking with the low single-digits it cited in December, Stifel said.
It said that CCE's lower cost guidance is a result of "superior hedging, an advantaged cost structure, and an advantaged procurement structure.
"CCE acquires its basket of inputs through Coke's global procurement operations, a large scale group with marketplace clout Britvic lacks," Stifel said.
CCE is expected to reiterate its earnings outlook when it presents at investor conference CAGNY later today.
Our latest management briefing, a combined effort with our sister site, just-food, is an extended, three-part preview of 'Social Media in the Food and Drinks Industry', a report now available on just-...
Tata Global Beverages is to launch a range of health beverages through its joint-venture with PepsiCo India, according to a report....
- Craft spirits shake-out will be just the beginning
- How Treasury is rewriting the rule book - Comment
- The decline of the flagship beer brand - Comment
- Job cuts not the whole story at AB InBev - Comment
- Coca-Cola India suspends bottling operations
- Diageo brands need "fixing and nurturing" - TWE
- Diageo revamps Gordon's gin bottle in UK
- Craft Brew Alliance poised for AB InBev takeover?
- SAB shareholders granted AB InBev vote split
- Pernod deal rescues Corby's FY
- The Next Seven Big Beverage Markets
- Global rum insights - market forecasts, product innovation and consumer trends
- Carlsberg AS (CARL B) - Financial and Strategic SWOT Analysis Review
- Global RTD insights - market forecasts, product innovation and consumer trends
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages