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

Flavour stick "ages whisk(e)y three years in 24 hours"

Whisk(e)y companies spend a lot of money and effort ageing their products for that premium taste....

BLOG

US lacks bottle for craft soda revolution

PepsiCo created a stir last week with the news it is testing a product called Caleb's Kola, with some in the media claiming it was the beginning of a new “craft soda” category....

BLOG

Beer cocktails abound as SABMiller gives Peroni a push

SABMiller's bid to widen the appeal of beer is very much in evidence at its latest 'House of Peroni' - with beer cocktails and a bigger bottle for the Italian lager brand on offer. ...

BLOG

The just-drinks Weekly Round-Up

Here's a round-up of the big stories on just-drinks last week, featuring PepsiCo, SABMiller, the Scotch whisky category and the US wine market....

just-drinks homepage



Forgot your password?