Flat Korean market could prompt Coca-Cola sale

By Neil Merrett

- Last updated on GMT

Related tags Coca-cola Coffee

Coca-Cola's Australasian bottler may offload its operations in
Korea, as it reviews its operations in the country amidst declining
sales of its brands, due to consumer health concerns.

Coca-Cola Amatil (CCA) which has controlled the beverage giants operations in the country since 1998, is co-operating with The Coca-Cola Company (TCCC) in a strategic review of its markets agreed two years ago by CCA's Group Managing Director, Terry Davis.

The timing could be fortuitous for CCA, with South Korea in particular proving to be a difficult market for Coca-Cola's brands.

Last year saw a consecutive fall in sales by a further 10 per cent to around €40m, as consumers turned to healthier beverages like green tea, which saw sales double to €36m. As a result of this decline beverage producers in the country are having to look for alternatives to carbonated beverages and coffee products.

This trend saw sales of functional drinks jump 25 per cent and mineral water by 5 per cent in 2005, according to report, by Yonhap news.

In facing these difficulties a spokeswoman for CCA told AP-Foodtechnology.com , that the company was in consultation with investment bank Goldman Sachs, in looking at the best options regarding ownership of its Korean operations.

"The assessment of the best ownership options for Coca-Cola Korea Bottling Company (CCKBC) - sale, part-sale or retention - is part of a full strategic review of CCA's business," she said.

"This may, or may not result in the divestiture of some or all of CCA's shareholding in CCKBC."

CCA was unable to comment on reports that parent company TCCC might reclaim its interests in Korea, though accepted it was not ruling out any potential move.

"A full range of ownership options is being assessed," added the spokeswoman.

CCA will announce its immediate plans at a strategic review on 18 April this year.

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