GERMANY: Coke bottling merger finally ready to go
The Coca-Cola Co is edging to closing to merging its German bottling operations into one entity.
The company's German subsidiary, Coca-Cola Erfrischungsgetränke confirmed yesterday (2 August) that it has finally signed a letter of intent to merge with its seven independent bottlers in the country. The companies are set to become one single bottler at the beginning of next year.
Financial details of the discussions, which have been running for well over a year, were not disclosed, while final approval is subject to anti-trust approval.
"This new aligned business system opens the door to many new positive opportunities," Coke said. "Importantly, the new bottler will be able to more effectively serve both customers and consumers in Germany and drive efficiencies and speed to market."
Coke has been in dispute with its independent bottlers in Germany since the US company said in late 2004 that it was planning to terminate their contracts prematurely. Contracts between Coke and its German bottlers are not due to run out until between this year and 2011.
While some local reports had suggested that Coke blamed the inefficient structure of its bottling system in Germany for falling sales in the country, a spokesperson for Coca-Cola Co. Europe told just-drinks today: "We have ultimately been aiming for one bottler for a few years now in order to increase the efficiencies that go with having just one bottler in one country.
"It's a milestone in the process," the spokesperson added. "What we need to do between now and the beginning of next year is to ensure that the dialogue continues."
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