Coca Cola terminates Delta's bottling deal

Coca Cola terminates Delta's bottling deal
Published: 20 July 2017
Delta Beverages yesterday issued a further cautionary statement advising that negotiations with The Coca-Cola Company (TCCC) regarding TCCC's intention to terminate the Bottlers' Agreements with Delta Beverages and its associate, Schweppes Holdings Africa Limited are ongoing and a solution that is not value destructive is anticipated.

Delta's sparkling beverage business, almost entirely dependent on bottling Coca Cola products, accounts for about a third of total sales and is its second biggest revenue driver after lagers.

Coca Cola's move raises the spectre of job losses at one of Zimbabwe's largest employers, worsening the situation in an economy groaning under a jobless rate estimated at 90 percent.

Coca Cola's bid to end the bottlers'agreements with the two firms follows the regulatory approval of the $104 billion merger between Anheuser-Busch InBev NV/SA (AB InBev) and SABMiller Plc, Delta's largest single shareholder with 38 percent. Delta is a 49 percent shareholder in Schweppes Zimbabwe.

"Shareholders are reminded that the Company is trading under a cautionary issued with respect to a notice received from The Coca-Cola Company advising of an intention to terminate the Bottler's Agreements with the Group entities. This followed the merger of AB InBev and SABMiller Plc in October 2016 and the subsequent agreement in principle reached between TCCC and AB InBev to explore options to restructure the bottling operations in a number of countries. The relevant parties remain engaged in discussions and stakeholders will be updated on progress," said the statement.
- Business Daily
Tags: Delta,

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