News

US: Hansen Natural sees US$120m charge after distribution tie-up

Most popular

Provenance and quality not enough for spirits - II

Advice for brewers in the time of COVID-19

Over the influence? The future of social media

Mangrove MD warns of coronavirus impact on spirits

Coronavirus special - US Distilled Spirits Council

MORE

Hansen Natural has warned that it will take a hefty charge following this week's announcement that it has secured a distribution deal with The Coca-Cola Co. and Coca-Cola Enterprises.

The US-based soft drinks company said earlier this week that Coca-Cola Co. and CCE will handle the distribution of Hansen's Monster Energy brand in six Western European countries as well as in Canada and selected territories in the US. The agreement has been designed to complement Hansen's current distribution relationship with Anheuser-Busch in the US on-trade.

Consequently, Hansen said yesterday (7 October) that it will "transition certain of its existing distribution arrangements to newly appointed distributors". In connection with the transition, Hansen said it will make termination payments in the region of US$120m. The payments are expected to be made in the fourth quarter of this year.

The company noted, however, that it will receive non-refundable contributions from newly appointed distributors, "covering a significant portion of the costs of terminating the affected distributors".

Among the distributors expecting to lose their distribution of Monster Energy in the US is Dr Pepper Snapple Group. The company said yesterday that it will record a one-time gain related to the contract termination when terms are finalised.

"Monster energy drinks are in less than one-third of our company-owned footprint," said DPSG's president and CEO, Larry Young. "The successful launch of Venom, Dr Pepper Snapple's own energy drink brand, as well as expanded distribution of Hydrive, an enhanced energy drink in which DPS has an equity stake, together with our integrated business model give us confidence that we will be able to build a broader and even stronger energy portfolio and continue to participate in the long-term growth of this category."

Hansen's agreement with Coca-Cola and CCE will take effect beginning in November in the US and parts of Western Europe, and in early 2009 in Canada.


Related Content

The Coca-Cola Co

The Coca-Cola Co "doesn't share energy drink plans with us" - Monster Beverage Corp CEO...

Coca-Cola European Partners lines up UK launch for Monster Beverage Corp's Reign

Coca-Cola European Partners lines up UK launch for Monster Beverage Corp's Reign...

Could Coca-Cola's Costa move signal a US coffee raid? - Analysis

Could Coca-Cola's Costa move signal a US coffee raid? - Analysis...

Diageo, Coca-Cola distribution tie-up in Chile producing

Diageo, Coca-Cola distribution tie-up in Chile producing "positive" results...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?