Coca-Cola Amatil confirmed today (13 October) that net profit growth was under increasing pressure from a rise in costs linked to higher underlying commodity and petrol prices.

The Australian soft drink bottler said third quarter trading has been in line with its expectations. It added that, at constant currency rates and assuming normal trading conditions in the peak selling period of November and December, it expects second half 2005 net profit growth to be in the low double-digits over the same period last year.

"Over the next 12 months, commodity prices are expected to continue to rise with an expectation of a moderation beyond that period. As a result cost of goods sold for 2006 are expected to increase by between 5-7%," a statement said today.

The company said that it had seen a return to growth in volumes in South Korea despite difficult external trading conditions. In particular, CCA highlighted the performance of the Minute Maid brand and Coca-Cola, which it said returned to growth in the third quarter, with a 4% lift in sales volumes. However, the second half trading result was still expected to be flat on last year.

In Australia and New Zealand, CCA said that it had experienced softer demand due to higher fuel prices and lower consumer demand. However, the group added that core Coke brands maintained market share despite the widening price gap between CCA brands and those of competitors.

In Indonesia, the company has seen an improvement in its operating performance on the back of increased brand investment and improved in-market execution, it said. In local currency terms, the Indonesian business is expected to achieve similar earnings growth in the second half as the 27% EBIT growth it achieved in the first six months of the year.

The company today also unveiled its new product pipeline, which includes a 1.5 litre Coke bottle, launched this month; Coca-Cola Zero, to be rolled out in the first quarter of 2006; Coke Citra, to be launched in New Zealand in October; Fruitopia Alive, to be launched in Australia this month, and Keri Fruit Freshers, to be launched in New Zealand in November.

CCA managing director Terry Davis said: "At the heart of our success in achieving double digit net profit growth for each of the last four years has been our commitment to product and package innovation. CCA's strong new product pipeline demonstrates the Coca-Cola system's ability to respond to changing consumer needs and creating greater levels of excitement in the non-alcoholic beverage market."