CHINA: GSK expands Lucozade in China
GlaxoSmithKline (GSK) has signed a deal to significantly expand sales of its Lucozade brand in China as it looks to increase its presence in emerging markets.
GSK this week announced it has signed an agreement with President (Shanghai) Trading Co, a trading arm of Uni-President China Holdings, a leading food and beverage company in China, to launch Lucozade in China.
GSK said the two companies are in the "early stages" of discussions on a range of additional opportunities.
"GSK is focused on building a diverse global healthcare business, and this agreement marks the first in a series of steps we are taking to expand our successful nutritional healthcare business into new and emerging markets," said John Clarke, president of consumer healthcare at GSK.
"Together with UPCH, we will now have significant new scale and local expertise to increase availability of the brand to more consumers in China, one of the world's largest and fastest growing economies."
With the new partnership, consumer access to Lucozade will increase "significantly" through UPCH's strong distribution network to diverse sales channels across China, GSK said.
"UPCH holds a leading position in the highly competitive juice drink and ready-to-drink tea markets in China, with nationwide reach to more than one million outlets," the company added.
Distribution of Lucozade under the agreement will begin in early 2010. GSK will continue to manufacture Lucozade at its existing manufacturing site in Guang Dong, China.
Sales of Lucozade slipped by 12% in the first quarter of 2009, GSK reported earlier this year.
Lucozade sales fell by 12% to GBP80m (US$117m) for the three months to the end of March. Its other soft drink brand, Ribena, saw sales slip by 5% to GBP38m for the quarter, compared to the same period last year.
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