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Coca-cola’s declining profits: supermarket wars blamed

Coca-Cole Amatil (CCL) has released its full-year results which show that even brands as big as the famous fizzy manufacture are not immune to the supermarket price wars.

CCL has not come out swinging as a result of the profit loss, which in itself is a telling tale.

Manufacturers are too scared of the power Coles and Woolworths wield in the sector, as the punishment for doing so can result in the company going out of business.

Last year CCL was excluded from Woolworths catalogues, in a prime example of the punishments the supermarket giants deal out to companies that get on the wrong side.

The Australian Competition and Consumer Commission (ACCC) is calling on people to dob in the dodgy practises of the big two, but Australian Manufacturing Workers Union (AMWU) National Secretary of Food and Grocery division, Jennifer Dowell, told Food Magazine companies will not speak up with the environment in its current state.

CCl chief executive, Terry Davis, wouldn’t officially say the name of the problematic buyer that impacted sales on a conference call, the Sydney Morning Herald reports.

”Whenever you have a scenario where, in this country, all consumer goods manufacturers have to deal with a very concentrated retail environment, you will go through periods of trading where you may not necessarily agree with their point of view, and they may not necessarily agree with our point of view” he said.

But experts are singing a different tune, saying the profits dip is clearly the result of the impact of the major supermarkets.

”We estimate CCL’s volumes at Woolworths fell about 6 per cent over the year, and based on the recent reductions in front of supermarket shelf space, we believe this customer will continue to impact CCL’s volumes through most of 2012,” Commonwealth Bank’s retail analyst team lead by Andrew McLennan said.

 

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