US/CANADA: Cott Corp. loses Wal-Mart exclusive supply deal
Cott Corporation is to lose its exclusive supply agreement with its largest customer, US supermarket chain Wal-Mart, the private label soft drinks supplier has said.
The Canada-based company said yesterday (27 January) that Wal-Mart will terminate its ten-year-old agreement without cause.
"While conversations with Wal-Mart are ongoing, and the impact on Cott's business is unclear at this time, the effect of this action is to phase out the exclusive nature of the relationship with Cott as the supplier of retailer brand CSDs in the US," Cott said.
The termination is effective on the third anniversary of notification in late-January 2012.
Wal-Mart's decision will give the supermarket company the opportunity to move as much as one third of its requirements in the first year following notification, and two thirds of its requirements in the second year.
"Wal-Mart and Cott continue to discuss a redefinition of their ongoing business relationship," Cott concluded.
Last February, Cott received notice of a reduction in shelf space and merchandising support for Wal-Mart's private label CSDs, including Sam's Choice.
The troubled Toronto-based firm's most recent results saw its net loss in the three months to the end of September leap to US$87.6m, compared to a loss of $5.8m in the corresponding period a year earlier. Sales slowed in the quarter, down to $420.5m from $464.5m.
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