"Coke have big problems maintaining their dominating market share at the higher margin they enjoy for so long and with more in=house private labels being offered in Coles & Woolies at 1/3rd of prices."
Just to clarify the issue. Woolworths and Coles aren't buying products for less than they sell them. Competitors are Tru Blu (P&N) and Asahi. Coke is losing against other soft drink companies.
Management blame supermarkets because it makes it seem like the issue is beyond their control. Like investors can't blame coke for what woolworths do. but it isn't Woolworths. Woolworths didn't wake up and say I'm gonna buy generic branded coke for $1/litre and sell it at $0.50/litre so I can lose money today. Woolworths found a supplier that sells it to them at $0.40/L and added profit margin to the price. consumers buy the cheap product because it offers better value.
The problem is CCA because CCA can't operate as cheaply as the competition. Even when it is a generic product that they don't pay royalties to Coke for, they can't do it at the price of their competition.
As an informative note, the owner of P&N use to work for CCAmatil for 20 years or something similar before starting his own soft drink company. You can bet your bottom dollar he knows everything CCamatil does and he knows a few ways to do things better than CCAmatil that he didn't tell them before quitting.
I guess the point I'm trying to make is that you have your head in the sand if you think Cokes issue is anything other than the fact that their competitors (other soft drink companies) are stealing their business by doing a better job at the same business CCAmatil are working in.
CCL Price at posting:
$10.46 Sentiment: None Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)