Coca-Cola Consolidated, Coca-Cola United, Swire
ATLANTA, April 16, 2013 – The
Under the new model, The
Coca-Cola Company and five U.S. bottlers have agreed in principle to take the
next step in creating a stronger U.S. business model through the granting of
new, expanded territories. The five
“A strong franchise system has
always been the competitive advantage of the
In the newly granted
- More rational and contiguous operating territories;
- A grant
of exclusive territory rights and the
Coca-ColaRefreshments of distribution assets and cold drink equipment;
finished goods model under which production assets will remain with
Coca-ColaRefreshments, which would facilitate future implementation of a national product supply system;
- An improved, more integrated information technology platform;
- A new beverage agreement that supports the evolving operating model.
“We believe that unique
competitive advantage lies in a U.S. system that can act with the speed of an
integrated, lower cost national business enabled by deep local knowledge,
community connections and the outstanding commercial capabilities of a strong
local bottling system,” said Steve Cahillane, President,
Depending on the situation, transactions might include an outright territory sale, a territory swap, or a sub-bottling arrangement (under which the bottler would make ongoing payments in exchange for exclusive territory operating rights). Financial terms were not disclosed.
These new territories will include some of the largest cities in the geographies that border these bottlers’ existing territories, allowing each bottler to better service local customers and provide more efficient execution.
- Coca-Cola Consolidated will assume territories in Tennessee, including the Knoxville market, and Kentucky, including the Louisville and Lexington markets;
- Coca-Cola United will assume territories in Alabama including the Montgomery market, and portions of northwest Florida, north and west Georgia and southeast Tennessee;
Coca-Colawill assume territories in the Denver and Colorado Springs, Colo., markets;
- Coca-Cola High Country will assume territories in the Sheridan, Wyo., and Billings, Mont., markets;
Coca-Colawill assume territories in the Jackson and Paris, Tenn., markets to expand its presence in west Tennessee.
The transactions announced today are subject to the parties reaching definitive agreements by the end of 2013, with closings expected during 2014. The parties are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and system associates.
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