Coke to pay $590M for Philippine bottler
Atlanta Business Chronicle : Friday, December 29, 2006
The Coca-Cola Co. will pay San Miguel Corp. $590 million to acquire 100 percent ownership of a Philippine bottler.
Coca-Cola agreed on Dec. 22 to buy San Miguel's 65 percent stake in Coca-Cola Bottlers Philippines Inc.
Coke disclosed the purchase price today in a filing with the U.S. Securities and Exchange Commission.
Coke said it entered into an agreement with San Miguel Corp. and two subsidiaries to acquire all of the shares of Coca-Cola Bottlers Philippines Inc. currently held by the sellers, representing 65 percent of all the issued and outstanding stock of the bottler.
Coke will pay $590 million, including $370 million at the closing, plus $100 million in escrow. Coke will pay another $20 million 18 months later, and another $100 million on the fifth anniversary of the purchase.
Saturday, December 30, 2006
Friday, December 22, 2006
Mexican soda lovers spared tax
MEXICO CITY, Mexico (Reuters) -- A proposed tax on fizzy drinks has caused a stir in Mexico, which quaffs more Coca-Cola products per capita than any other nation and has adopted soda alongside tacos and chiles into the national diet.
The Senate on Wednesday rejected a 5 percent tax on all carbonated beverages, a controversial part of new President Felipe Calderon's 2007 budget plan. Opponents say it would have hurt the poor, many of whom prefer sodas because potable water is less available and sometimes more expensive.
Each Mexican gulps down an average of about 40 gallons (150 liters) of carbonated drinks a year, according to the country's producers. Year-round heat throughout much of the country helps to whet their thirst.
"Many people are so addicted that without Coke, they can't live," said street burger vendor Gonzalo Alvarez.
The Chamber of Deputies backed the soda bill this week but the Senate voted 73-55 against it. The measure will be returned to the lower house, where it is unlikely to survive given Wednesday's lopsided vote.
Mexico's soft drinks association says the poorest Mexicans spend as much on soda as they do on tortillas or beans and that the tax would hurt them disproportionately.
The country topped Coca-Cola's 2005 list of per capita consumption of company beverages with 533 servings.
But nutritionist Enrique Rios said a tax on fizzy drinks would force more Mexicans to turn to fresh fruit juice, abundant and inexpensive in a country like Mexico.
Producers counter that soft drinks are a necessity for Mexico's poor.
"There are people who drink soda starting in the morning as part of their diet. The calories they get from the drink and its sugar, although not many, keep them going," said Alfredo Paredes, spokesman for the low-cost Big Cola brand.
Mexico needs new sources of income because the government is vulnerable to a drop in revenue from crude exports due to falling world prices and a key oil well beginning to dry up.
"We have to work for fiscal reform so we aren't dependent on the price of petroleum, so that we have a broader base of contributors with less tax evasion," said Gustavo Madero, a conservative National Action Party senator and leader of the congressional finance committee.
The tax vote was an early indicator of whether Calderon, who took office on December 1, will be able to persuade Congress to pass energy and other economic reforms.
His predecessor Vicente Fox failed in his effort to put a tax on food and medicine due to opposition in Congress and from ordinary Mexicans.
Wednesday, December 13, 2006
Coca Cola News
Diet Coke Plus is Diet Coke, but healthier
Coca-Cola is planning to launch a new version of Diet Coke in 2007. No, this isn't going to be like the disaster that was "New Coke" in the 1980s. The drink is actually going to be similar to the current Diet Coke, but it will be fortified with vitamins and minerals, meaning that people will have even more of a reason to opt for diet than just wanting to cut down on calories: they can do it for their health. Diet Coke Plus, as the drink is called, will be "the first nutrient-enhanced carbonated soda to be offered by a major brand" and will not replace the current Diet Coke, which is the best-selling sugar-free soda in the world.
A sugar-free, but nutrient-filled, drink will certainly have a lot of appeal in an increasingly health-conscious society, but is it enough to convert people to diet Coke from other sources of vitamins? Assuming that it ends up tasting like the standard diet Coke, would you give it a try?
Monday, December 11, 2006
Coca-Cola News
Coca-Cola Promotes Kent to President, Operating Chief
Coca-Cola Co., the world's largest soft-drink maker, promoted international chief Muhtar Kent to president and chief operating officer, putting him in line to succeed Chief Executive Officer E. Neville Isdell.
Coca-Cola Co., the world's largest soft-drink maker, promoted international chief Muhtar Kent to president and chief operating officer, putting him in line to succeed Chief Executive Officer E. Neville Isdell.
Kent, 54, assumes his new duties immediately, the Atlanta- based company said today in a statement. Kent has worked for Coca-Cola or its bottlers for almost 30 years, and he previously oversaw international operations that account for 80 percent of Coca-Cola's profit and $15 billion in sales.
Isdell has increasingly relied on Kent to improve Coca- Cola's relationship with Mexican bottler Coca-Cola Femsa SA, to consolidate bottlers in Germany and to negotiate to buy a majority stake in Philippines bottler San Miguel Corp. Kent becomes a likely successor to Isdell, 63, as the company tries to boost growth of healthier drinks as consumers cut back on soda.
``Kent knows the Coke system inside and out, from both the bottler side and the Coke side,'' said Keith Patriquin, an analyst at Lookis Sayles & Co. in Boston, which holds Coca-Cola shares among $70 billion in assets. ``He's as advanced as anyone on the learning curve. Coke needs more people with the experience to know what bottlers really want and need.''
Kent's promotion raised concerns from some investors over his short sale of Coca-Cola Amatil Ltd. stock a decade ago, when Kent was a manager at the Australian bottler.
``Why in this post-Enron era would a company consider a candidate who has these allegations buzzing around his head like bees?'' said James Berman, CEO of JBGlobal LLC, a New York-based hedge fund that manages $28 million and has Coca-Cola among its top five holdings. ``They've not given a full explanation, they've not given all the records. I think it's inexcusable.''
Retirement Plans
The company hasn't had a president since 2004, when Isdell came out of retirement to run Coca-Cola and assumed both CEO and president duties.
Isdell hasn't said when he plans to retire. Coca-Cola spokesman Ben Deutsch said neither Isdell or Kent would be available for comment today.
Shares of Coca-Cola rose 34 cents to $48.72 at 4:02 p.m. in composite trading on the New York Stock Exchange. They have gained 21 percent this year, while PepsiCo Inc., the second- largest soft-drink maker, has climbed 7 percent. PepsiCo in August promoted finance chief Indra Nooyi to succeed Steven Reinemund as CEO of the second-largest soda maker.
Coca-Cola's growth has lagged behind PepsiCo, which leads in noncarbonated drinks with Gatorade and Lipton tea. Sales at Coca-Cola, which depends on soda for 80 percent of its volume, have increased an average of 3 percent over the past five years, while PepsiCo's sales have gained an average of 5 percent.
Isdell said today in an internal memo that Kent is ``one of our system's most dedicated and loyal associates.''
Analyst Speculation
Analysts have speculated for months about Kent's promotion, creating the company's first succession plan since former Chairman Roberto Goizueta died suddenly of cancer in 1997.
Both John Faucher, a J.P. Morgan Securities Inc. analyst, and Mark Swartzberg, an analyst with Stifel Nicolaus & Co., said in notes today that the appointment makes Kent the likely successor.
The heads of all geographical regions, including J. Alexander Douglas of the North America unit, will now report directly to Kent. The leaders of other functions, including Chief Financial Officer Gary Fayard and Marketing and Innovation Chief Mary Minnick, will continue reporting directly to Isdell.
Kent began working for Coca-Cola in 1978, and has overseen several of the company's key regions such as Eastern Europe and North Asia.
Short Sale
Kent shorted 100,000 shares of Australian Coke bottler Amatil in November 1996, just hours before the company said profit would miss Wall Street's estimates, sending shares down 12 percent the next trading day. Short sellers are investors who sell borrowed shares with the hope of profiting by buying them back after a decline.
The trade was investigated by Australian regulators and Kent later resigned from Amatil. Kent, who wasn't charged, paid the equivalent of $260,000 to settle the case and cover the cost of the regulatory investigation.
Kent has said the short sale was made by his financial adviser, whom he had given authority to make trades on his behalf to diversify his investments beyond Coca-Cola and Amatil stock.
Coca-Cola's board hired an outside law firm to do an investigation before Isdell re-hired Kent in 2005 from Turkish Coke bottler Efes Beverage Group. Coca-Cola hasn't made the results of its investigation public.
`Not an Issue'
Isdell said in January that the short-selling was ``not an issue anymore'' and that he ``wouldn't have rehired him if I had any discomfort whatsoever about what happened.''
``If it didn't give the board cause for concern, it doesn't give me cause for concern,'' said Patriquin.
Kent was born in New York and received a bachelor's degree in economics from the University of Hull in the U.K. and a master's from London City University Business School.
Coca-Cola has been without a president since Steve Heyer left in 2004 to become CEO of Starwood Hotels & Resorts Worldwide Inc.
Thursday, December 07, 2006
Diet Coke
Diet Coke or Diet Coca-Cola is a sugar-free soft drink produced and distributed by The Coca-Cola Company. It was introduced in the United States in July 1982, and was the first new brand since 1886 to use the Coca-Cola trademark. The product quickly overtook Tab in sales. In most non-English-speaking markets it is called Coca-Cola Light or Coke Light.
Diet Coke was sweetened with aspartame as soon as it became available in the U.S., 1983; however, to save money, this was originally in a blend with saccharin. After Diet Rite cola advertised its 100 percent use of aspartame, and the manufacturer of NutraSweet (then,
In other countries, where cyclamates were not banned, as they were in the U.S. and the United Kingdom in 1970, Diet Coke or Coca-Cola Light may be sweetened with a blend containing cyclamates, aspartame, and acesulfame potassium. Fans of the drink often express a strong preference for either the European formula or the American-British-Canadian version. Contrary to some reports, Coca-Cola Zero is not the European Coca-Cola Light formula.
In 2005, under pressure from retailer Wal-Mart (which was impressed with the popularity of Splenda sweetener), and despite their previous blunder with New Coke, the company released a new formulation called "Diet Coke sweetened with Splenda". Sucralose replaces aspartame in this version. Early sales reports for this version were not quite as strong as anticipated; however, Coca-Cola did little advertising for the brand, investing money and advertising in Coca-Cola Zero instead. The introduction of the Splenda sweetened version of Diet Coke saw complaints to bottlers, as store shelves would often go with very little of the normal version of Diet Coke.
Diet Coke does not utilize a modified form of the Coca-Cola recipe but is instead an entirely different formula. The controversial New Coke, introduced in 1985, used a version of the Diet Coke recipe that contained sugar and had a slightly different balance of ingredients. In 2004 Coca-Cola introduced Coca-Cola C2, which it claims tastes much closer to Coca-Cola but contains half the carbohydrates.
When Tab was released in 1963, the Coca-Cola Company refused to use the Coca-Cola brandname, fearing that its flagship brand might suffer by being used on another product, the long-term viability of which was uncertain. Its rival Pepsi had no such qualms, and after the long-term success of its sugar-free brand Diet Pepsi, launched in 1964, became clear, Coca-Cola decided to launch a new sugar-free brand under the Coca-Cola name to compete with Diet Pepsi. With the well-known name, it could be marketed more extensively than the more anonymously dubbed Tab.
Diet Coke and Diet Pepsi have capitalized on the markets of people who require low sugar regimens, such as diabetics and people with other health conditions, athletes, and people who want to lose weight. In the UK, a 330 ml can of Diet Coke contains around 1.3 Calories (5 kilojoules) compared to 142 Calories (595 kJ) for a regular can of Coca-Cola.
According to the company's UK website as of 2004:
- Diet Coke is the #1 selling sugar-free soda in the world;
- Diet Coke is the third-largest brand at the company, and the fourth most-popular carbonated soft drink in the world;
- Diet Coke is sold in 149 countries; in 46 of them, where diet has undesirable connotations, it is known as Coca-Cola Light;
- The top five markets for the brand are the United States, the United Kingdom, Germany, Canada, and Brazil.
- Some predict that Diet Coke will soon overtake Pepsi as the #2 soft drink in the USA because, over the last decade, Pepsi has lost market share (down to 11.2% in 2005) and Diet Coke has gained market share (up to 9.8% in 2005)
In Germany and nearby countries, the drink is referred to as Cola Light, a usage the Coca-Cola Company has tried hard to discourage, as cola is a generic word that refers to any such drink; likewise, the company has fought a long battle against the use of Cola instead of Coke. Commercials refer only to Coke Light or Coca-Cola Light. In France and in the spanish-speaking-countries the term Coca Light is normally used.
Advertising slogans
- "Just for the taste of it!" USA, 1982
- "Taste it all!" USA, 1994
- "Light it up!" USA, 2006
Debate over health issues
Diet Coke (and other beverages using aritificial sweeteners) relies on Aspartame, which has been blamed by some scientists and medical professionals for possibly causing serious illnesses (such as brain tumors, brain lesions, and lymphoma) when consumed in large quantities. Other researchers have found no such link, or believe that the quantities in sodas such as Diet Coke are much too small to cause adverse effects.
Ingredients
- Carbonated water
- Caramel Color
- Aspartame
- Phosphoric acid
- Potassium benzoate (to protect taste)
- Natural flavors
- Citric acid
- Caffeine
Trivia
- It is possible to cause a sudden high-pressure release of carbon dioxide known as a Mentos eruption by inserting multiple Mentos into a container of Diet Coke. Mythbusters found this is caused because of nucleation as well as certain catalysts in the Diet Coke and Mentos themselves. The phenomenon is described in some detail by the General Chemistry Online! FAQ, which also attributes it to nucleation.[2]
External links
Sunday, December 03, 2006
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