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

Make way craft, here come the indie brewers

Could it happen? According to this report, a section of the beer community wants to ditch the word craft. They prefer instead the term “Indie” for brewers they believe follow the enlightened path of t...

BLOG

Kent's dire warning puts Coca-Cola woes in the shade

The global elite were in Switzerland last week for the World Economic Forum in Davos, the annual corporate huddle for the rich and powerful. The CEO of The Coca-Cola Co, Muhtar Kent, was there too, de...

BLOG

PepsiCo wakes up and smells the latte

With The Coca-Cola Co stealing yesterday's limelight with its new united marketing strategy for brand Coke yesterday, a Forbes interview with PepsiCo North America Beverages' new CMO, Seth Kaufman, sl...

BLOG

Coke Life threatens Coca-Cola's united front

It is a bold attempt to regain a measure of control in the ever-spiraling debate about sugar. But will The Coca-Cola Co's new marketing strategy - which for the first time ties all of the Coke family ...

just-drinks homepage



Forgot your password?