While the top story this week for the alcoholic drinks industry has been SABMiller’s deal to buy Foster’s Group, the move has also been felt in soft drinks circles.
Yesterday (22 September), the head of Australia’s Coca-Cola Amatil (CCA) hailed the takeover agreement as “a great deal” for the company. CCA has a beer joint-venture with SABMiller in Australia, Pacific Beverages and, if the transaction goes ahead, SABMiller will become legally-entitled to purchase CCA’s 50% share of the division. CCA will then be restrained from selling, distributing or manufacturing beer in Australia for at least two years.
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It appears likely that CCA may look to offset the demise of Pacific Beverages and capitalise on its extensive distribution network by acquiring Foster’s spirits and ready-to-drink businesses, which include the Cougar and Black Douglas whiskies.
Analysts expect CCA to book a profit of more than AUD$200m (US$196.5m) on its joint-venture sale, which CCA could then use to make the Foster’s purchases.
Elsewhere, PepsiCo has been making its own waves in the soft drinks industry on two counts. Last week the firm announced several executive changes in its North America territory, following the move up this week with the formation of a ‘council’ to bring together its food and beverage units in the US.
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It is no secret that beverage firms have been treading water in what has become a struggling and rather shaky North American soft drinks market, and these latest moves by PepsiCo have only led to further speculation about the value that could be unlocked through a potential break-up of the company.
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By GlobalDataNo PepsiCo announcement however, is complete without a Coca-Cola one. The firm’s latest attempt to improve profits in a tough US soft drinks market is through the launch of a “mini” drinks bottle. The new 12.5oz bottle follows the release of its 16oz bottles last year, and is anything but surprising, given the number of new bottle and can sizes that have hit the shelves in recent months.
The move will no doubt please the health lobby, help cash-strapped consumers to keep buying and potentially – and more importantly for Coca-Cola – improve profit margins.
Other movers and shakers in the soft drinks industry this week include Reed’s and Pulse Beverage Corp. Both firms have signed their fourth distribution deals this year in their bids to expand the reach of their products.
Reed’s has appointed Johnson Brothers for distribution throughout Las Vegas, while the relatively-new Pulse Beverages has secured a deal with Trent Beverages for Southern California.
Next week will see the publication of AG Barr’s interim first-half results. The company is forecasting a 3.5% increase in six-monthly net sales.
