Coca-Cola's Austrian unit is to relocate production to Vienna, according to reports. The company said yesterday (22 November) that it will cease production in Salzburg and concentrate in Vienna from the beginning of next year.

While the unit in Salzburg will remain a distribution and logistics centre, it is feared that a total of 85 of the 117 employees may be laid off. The Coca-Cola executive board, the works council and trade unions will prepare a social plan, including voluntary severance payments, the company said.

The production reorganisation is a result of the intensified dynamics on the European market and the constantly growing competition among international companies, Coke said.

Nearly half of Coke's Salzburg output went to Germany, where the soft drinks market has changed drastically in the last two years. The change in demand and the resulting low capacity utilisation, as well as the concentration of large warehouses in eastern Austria has pushed Coke to relocateproduction to Vienna.