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UK: Cadbury Schweppes unveils drinks unit name

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Cadbury Schweppes has announced the new name for its soon-to-be demerged North American drinks unit.

The UK-based drinks and confectionary group, which today (11 December) updated its full-year guidance, has said the division will be renamed Dr Pepper Snapple Group Inc. The unit had been the subject of sale speculation earlier this year, until Cadbury Schweppes confirmed in October that it was going to demerge the division. The company also noted that the separation process remains "on track", and should be completed by the middle of next year.

The North American beverage unit is expected to deliver a rise in full-year sales in 2007 of between 4% and 5%, the group said, despite the poor performance of the recently-launched Accelerade sports drink brand.

"The performance of the US market has improved in recent months and our share of the CSD category is ahead," the company said. "In CSDs, key features of this performance have been continued growth in our core flavour brands - Sunkist, A&W, 7 UP and Canada Dry - and an improved performance from regular and diet Dr Pepper." In non-CSDs, performance was boosted by the launch of Snapple super premium teas, although the national launch of Accelerade in the second quarter was described as "disappointing" with losses arising from the launch expected to be around GBP30m this year.

"We have decided to focus on a narrower range of outlets going forward and do not expect to incur further losses," the company noted, with a spokesperson for Cadbury Schweppes telling just-drinks today: "We tried something new, in the form of an aggressive launch of a niche product into the mainstream grocery sector, and it didn't work this time."

Last month, Americas Beverages lost the distribution rights of the Glaceau vitamin water brand when Glaceau, also known as Energy Brands, was acquired by The Coca-Cola Company in May. Cadbury Schweppes noted today that the termination of the Glaceau contract will result in about GBP20m lost contribution next year.

Like most drinks companies around the world, Cadbury Schweppes warned that commodity cost increases will be of concern next year, with cost rises expected to be at the upper end of the 5% to 6% range previously indicated.


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