The Coca-Cola Co has been particularly active this week, kicking off with an announcement on its plans to invest in Russia.
The US soft drinks firm has pledged a spend of US$3bn in Russia over the next five years, on top the $3bn already invested to date in the country by the companies within the Coca-Cola system there.
The news is sure to grab the attention of its closest rival PepsiCo, who purchased Wimm-Bill-Dann, Russia’s biggest food and beverage company, earlier this year, giving PepsiCo the top spot in the country’s juice and dairy market. Yet another sign, then, that the cola wars – and, increasingly, the juice wars – are moving east.
Aside from the launch of Coca-Cola’s global campaign for the London 2012 Olympic Games and a Coke Zero campaign, both launched this week, the company’s chief executive Muhtar Kent has also been voicing his opinion on the US business environment.
Kent told the Financial Times that he sees the US becoming “a less friendly business environment” than China, likening the developing economy to “a well-managed company”. He cited political gridlock and an antiquated tax structure in the US as reasons for making the market less competitive.
In Europe this week, while governments continue to try to avert an economic meltddown, the issue of soft drinks taxes is gaining traction.
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By GlobalDataFood and Drink Industry Ireland voiced its concerns over the possible implementation of a tax on sugar-sweetened soft drinks in Ireland. The issue has been the subject of debate for some time in the US and looks like it has now hit European shores. Irish Health Minister James Reilly said he has been looking at similar tax models to those introduced recently in France. Last month, French ministers confirmed that VAT on soft drinks with added sugar will rise from 5.5% to 19.6% from 1 January 2012.
The Irish proposal, however, is only at discussion stages and no decision has yet been made.
Finally, AG Barr released its first-half results on Tuesday, revealing an 11.6% increase in net profits. Analysts were upbeat, hailing the results as “a solid financial performance”, and in line with expectations.
Britvic is set to issue its full-year trading update on 20 October, so it will interesting to see how the two UK soft drinks makers fare against each other.
