Blog: Chris Brook-CarterWater under the bridge

Chris Brook-Carter | 29 June 2004

As the deadline approaches for reaching an agreement with unions for around 1,000 job cuts at Nestle's unprofitable Perrier plant in France, the company's threats to sell off the water brand look increasingly weak.

Speculation has mounted recently, that Nestle would look to sell the brand if it cannot settle the row with unions at the plant. Nestle set a deadline of tomorrow to resolve the matter.

In the Wall Street Journal Europe yesterday, a number of analysts suggested that Nestle would find selling the brand harder than it thinks.

Rene Weber, analyst at Bank Vontobel, told the newspaper that he is confident the two parties will eventually resolve the conflict. “I still believe there will be an agreement. The unions have to be aware that any other solution, such as a sale to a third party, could hurt even more,” he said.

Nestle can't simply close the plant, because of the power of French unions and the nature of the business - a mineral-water plant is dependent on a well and can't be moved, analyst Patrick Hasenboehler at Bank Sarasin told the journal.

Selling Perrier to a financial investor might be a possibility, Hasenboehler said. However, a protracted struggle is the most likely scenario, he added. “I think it's entirely possible that Nestle continues to muddle through until some sort of solution appears.”

Although Nestle has said that it is a priority to reach an agreement before the summer holidays, the company has indicated it may extend the deadline beyond tomorrow if there is progress in the negotiations.


BLOG

US beer called "filthy water" as Czech president gets patriotic

The long-running spat between US and Czech brewers stepped up a notch this week after the Czech president described American beer as “filthy water”....

BLOG

Has beer gone to the dogs? Will it make you feel ruff? Has it got... OH, FORGET IT!

I've stopped short of covering it as a product launch story on just-drinks, but take a look at this. Released this month in the UK, Snuffle Dog Beer is already available in 25 markets....

BLOG

PepsiCo caught in Amazon attack

PepsiCo received high praise when it announced it was to launch its stevia-based Pepsi extension True exclusively on Amazon in the US....

BLOG

Diddy shows he's a Diageo man with prod at Patron

Sean 'Diddy' Combs, the US rapper and entrepreneur, has publicly turned against his apparent former favourite Tequlia brand, Patron, now that he is joint-owner of DeLeón Tequila....

just-drinks homepage



Forgot your password?