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A recent report has warned that confidence in the soft drinks industry in Europe is on the slide.

In its European Soft Drinks Quarterly Review for the third quarter of this year, consultancy company Canadean has noted that the continent is split in terms of future prospects between east and west.

In the third quarter of this year, the report noted, West Europe's soft drink market edged forward by 1%. The comparable period in 2007, however, saw many key parts of the region experience unusually cool summer conditions, with the rise seen by many as another symptom of the global economic slowdown. "This reflects a marked deterioration in industry confidence, with Canadean research consultants on the ground reporting a worsening outlook in every market in West Europe, with the exception of the Netherlands and Norway," the company said.

While juices, which have endured high concentrate prices during much of 2008, witnessed a downturn in summer sales of between 3% and 4%, the still water segment, which has contributed so much to the region's soft drink boom in recent years, now looks vulnerable as consumers switch back to tap water, Canadean said.  The company has subsequently downgraded its still water forecast for West Europe down to 1% this year. Amidst this gloom, however, the report said that the energy drink category remains firmly in the growth stage of its lifecycle, with sales increasing by 15% during the quarter, while the mature carbonates category enjoyed a gain of 2%.

In East Europe, meanwhile, Canadean's consultants in Bulgaria, Serbia and Slovenia have reported a mild improvement in confidence levels. East European third quarter soft drinks sales climbed by nearly 2% in quarter three, with the company anticipating end of year results to register around 3%.
 
Russia, however, saw soaring inflation rates contribute to a 7% fall in soft drinks sales, a situation compounded by colder summer temperatures on the same period last year.

"Canadean's third quarter review does spotlight some positives in the European soft drink's marketplace but the overall picture exposes the changing mood of those on the frontline of the industry," the company said. "Soft drink operators are bracing themselves for a bumpy ride ahead."


Sectors: Soft drinks, Water

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