just On Call - Coca-Cola Enterprises confident on pricing
Coca-Cola Enterprises said it is “continuing to layer on commodity hedges for next year”.
Coca-Cola Enterprises (CCE) has said that the firm's brand strength in Europe gives it enough clout to use pricing to fend of higher commodity costs for the rest of 2011.
Speaking on the company's first-half earnings call today (28 July), CCE's CFO, William Douglas, said the company is around 9% hedged on key commodities for 2011.
Regarding 2012, Douglas said that, while it is too early to finalise pricing plans in all of its markets, the company is "continuing to layer on commodity hedges for next year".
Higher commodity costs have dominated discussions in the soft drinks industry so far in 2011, with higher prices needed in order to protect margins.
Douglas said that he believes consumers will accept price increases and that the soft drinks sector in Western Europe can continue to expand in terms of both sales and profits.
He said: "Our brand strength in Europe gives us a high degree of confidence that we will be able to take appropriate pricing in the marketplace and, I think from a commodities management strategy, I feel very confident that we will be competitive in the market place as well.
Commenting on 2012, he said: "Will it be another challenging year? Probably so, but we are very confident of that environment and our ability to manage our way through it, in a successfully similar way to how we have navigated though it this year."
CCE shares were down 2.83% to US$28.50 at 11.34am ET today.
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