Coke could buy up bottlers

The Coca-Cola Company is in talks to buy the North American operations of its largest bottlerÔÇöwhich goes against its 14-year-old strategy of keeping its bottling operations separate from its main soft drinks business.  If the partial acquisition of Coca-Cola Enterprises (CCE) goes ahead, the rest of the bottler would remain independent and buy Coke bottling operations in Scandinavia and Germany, according to reports. CCE already has operations in several European countries. Including debt, the value of the acquisition could be worth more than $13 billion. For 14 years, Coke has kept its main operationsÔÇöthe development and marketing of the syrup concentrates that form the basis of its carbonated drinksÔÇöseparate from the production and distribution of the end products. The companyÔÇÖs US bottlers are handling an increasingly wide range of small brands, including tea, juices and enhanced water, alongside the more established soda brands. CCE is the largest of a network of 74 different US bottlers that buy soda syrup from Coke and then bottle and distribute the finished drinksÔÇöusually directly to stores. It handles around 42 per cent of Coca-ColaÔÇÖs sales of soda concentrate in the US. CokeÔÇÖs main bottler in North America and Western Europe, CCE sold close to 41 billion bottles and cans last year, which represented about 16 percent of CokeÔÇÖs worldwide product volume. Based, like Coke, in Atlanta, the bottler reported a $731 million profit for the year. Coke owns several of its bottlers around the world, including those in Brazil, India and China. The move to acquire bottling operations echoes a move by CokeÔÇÖs rival PepsiCo in response to falling sales of soft drinks. In August it announced it would buy its two biggest bottlersÔÇöPepsi Bottling Group and PepsiAmericasÔÇöin a deal valued at $7.8 billion. PepsiCo estimated it would save $400 million from buying the bottlers. Coke is said to want greater flexibility in adapting to consumer tastes, and believes that reacquiring bottling operations will help it to achieve this. The move would also likely simplify the operations of the companyÔÇÖs sales to the food service business, where restaurant operators are currently serviced by a mix of wholesalers, bottlers and direct company sales. Industry analysts have said that the deal could mean lower prices for Coke's everyday consumers, as some costs of distribution would be eliminated. A wider variety of drinks, including niche products, would also be available in stores as Coke would gain greater distribution flexibility. Neither Coke nor CCE have commented on the reports.