Dive Brief:
- Three European Coca-Cola Co. bottlers, Coca-Cola Enterprises Inc., a bottler for Western Europe, Coca-Cola Iberian Partners, and Germany’s Coca-Cola Erfrischungsgetränke AG, are discussing a potential merger, according to sources from The Wall Street Journal. Only the German bottler is owned by Coca-Cola, while the other two are independently owned.
- As soda sales fall, including in Europe, Coca-Cola has scrambled to merge smaller overseas bottlers to increase efficiency and reduce costs, so this merger would fit well into that plan.
- Similar mergers have already taken place in recent years: "In 2013, the Atlanta beverage giant helped negotiate a merger between seven Spanish and one Portuguese Coca-Cola bottlers, creating the Iberian Partners business. The same year, it sold its bottling assets in the Philippines to Coca-Cola Femsa SAB, its Mexican bottler. And last year, it helped forge a deal to combine bottling operations in Southern and Eastern Africa into one serving 12 countries," The Wall Street Journal reported.
Dive Insight:
Coca-Cola sees these mergers as an advantage. "Larger bottlers would be better able to market and advertise Coke and other beverages and have more flexibility in pricing and packaging," according to The Wall Street Journal.
Better efficiency and more flexibility have been behind other decisions Coca-Cola has made. The company is on a plan to cut $3 billion a year in costs through 2019, which includes a lay off of up to 1,800 employees globally.