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UK/MIDDLE EAST: Vimto to profit from Coca-Cola Co, Aujan deal

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The Coca-Cola Co's tie-up with Aujan carries significant benefits for Vimto, the flagship soft drink of UK-based firm Nichols, analysts believe.

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Coca-Cola's agreement to acquire 50% of Aujan Industries' beverage business for US$980m is expected to provide more firepower to Vimto. Aujan already holds the rights to the brand across the Middle East, where it has become a popular choice during the Ramadan religious festival.

Vimto accounts for 20% of Aujan's net sales and is one of three brands highlighted as potential growth engines for the Coca-Cola/Aujan partnership. "All three brands should benefit from increased investment and distribution in the Middle East & North Africa region over the medium-term," said analysts at Panmure Gordon & Co today (15 December). Aujan plans to double net sales in its beverage unit within five years.    

Vimto owner, UK-based Nichols, has already benefited from the drink's reach in the Middle East. In 2010, the region was Nichols' largest export market, accounting for GBP9.1m (US$14m) in net sales, equivalent to 11% of the UK company's annual sales, Panmure analysts said.

In the first half of 2011, to the end of June, Nichols' international sales increased by 13% in value. In August, Nichols' finance director, Tim Croston, told just-drinks that "there is about two-and-a-half times as much Vimto consumed overseas as there is in the UK".


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