CCE updated its cost of sales per case outlook for 2011 two weeks ago

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.