CCEs CFO William Douglas told analysts that CCE had experienced “some” customer boycotts in France over price increases

CCE's CFO William Douglas told analysts that CCE had experienced “some” customer boycotts in France over price increases

Coca-Cola Enterprises (CCE) is facing a number of customer boycotts in France, following price increases on its soft drinks to offset a new tax.

Speaking on the firm's earnings call yesterday (9 February), CCE's CFO, William Douglas, told analysts that the bottler had experienced "some" retail customer boycotts in France over price increases. "These kinds of discussions are always challenging," he said.

In January, France's Government approved and implemented a tax hike on added sugar soft drinks and a lesser rise on drinks containing sweeteners. CCE had labelled the tax as "unjust, unfair and not the best way to proceed".

Speaking to analysts this week, Hubert Patricot, executive vice president and president of CCE Europe, said that it is "too early to understand the rolling impact fully of this tax".

"The tax increase was activated to all customers on 1 January, and accordingly we noticed that the January retail price progressively increased in France on most of our products and package," Patricot said. "At the same time, we are just finalising our discussion with our customer on a timeline, which is a usual one.

"We would consider that historically low elasticity of our product will and should moderate the negative volume impact to anticipated growth," he added. "But, as I said, the customer dialogue continues regarding our annual price increase, and we would see the full impact in the tax and the price increase probably in the end of the quarter."

Yesterday, CCE reaffirmed guidance for a high single-digit rise in net sales for 2012, with operating profits expected to increase in mid-single digits.

For the 12 months to the end of December 2011, CCE's net sales jumped by 23% to US$8.3bn. Based on continuing operations and excluding currency gains, the firm's sales increased by 5% on the previous year.

Operating profits for the year rose by 27.5% to $1bn, while net profits increased by 20% to $749m. On a like-for-like basis, operating profits rose by 9%.

Click here to view the full earnings call transcript.