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US: Coca-Cola modifies deal with CCE

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The soft drinks giant, Coca-Cola Co., has announced changes to its profit-sharing agreement with its largest bottler, Coca-Cola Enterprises (CCE), which will add funds to an existing $1.2 billion support package.

The changes are modifications to a deal agreed between Coke and its largest bottler in 2001 aimed at dividing profits more equitably between to the two parties.

CCE was originally to receive $250m from Coca-Cola to go towards marketing and promotional expenses. Under the changes, which were announced in a filing to the Securities and Exchange Commission, CCE will now receive only $200m next year but an additional $275m over the next eight years up to 2011. In addition, each company will be able to retain cost savings it generates from joint programmes rather than splitting them equally as stipulated in their original agreement struck in 2001.

Also included in the deal is an understanding that Coca-Cola will raise the price it charges CCE for soft drink concentrate by only 1% in 2003.

Coca-Cola is also to share 50-50 with CCE profits it makes from water brands marketed through a joint venture with Danone agreed earlier this year in which Coke has a 51% stake. It was also announced that Coca-Cola is to purchase a non-carbonated drinks bottling plant in Missouri from CCE for $55m.


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