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Analysis - Coca-Cola Co's foreign bottlers in line for US entry

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The Coca-Cola Co's refranchising moves could lead to foreign bottlers such as Coca-Cola FEMSA and Arca entering the US market, an analyst has said.

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Coca-Cola this week unveiled a new distribution model for the US that will offer five independent bottlers in the country the chance to expand their territories. Commenting on the plan yesterday (17 April), CLSA analyst Caroline Levy said: “These bottlers could likely add more territory in the future, and other bottlers such as FEMSA or Arca might enter the US.”

FEMSA has already made moves overseas, completing in January the takeover of a majority stake in Coca-Cola Bottlers Philippines. The takeover was its first acquisition outside Latin America and an initial step in a stated ambition to spread beyond its traditional boundaries.

Levy called Coca-Cola's restructuring plan “the first step towards best-in-class execution for all of the US”. “We prefer in-market responsibilities in the hands of these talented independents, freeing Coca-Cola to focus on brand building and innovation,” she added.

A sale of Coca-Cola's Germany operations to Coca-Cola Enterprises (CCE), she added, is still expected this summer. CCE has until next month to make use of an option to buy the operations.


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