Coca-Cola announced on Saturday that it will be refranchising its Chinese bottling operations to Hong-Kong conglomerate Swire Pacific and COFCO Coca-Cola Beverages Limited.
Coca-Cola's bottling plants in China are responsible for the manufacture, distribution and sale of non-alcoholic ready-to-drink beverages across the mainland.
Muhtar Kent, chairman and CEO of The Coca-Cola Company, said, “By refranchising all our company-owned bottling operations in China to strong local partners, we position these companies to leverage greater scale, capability and efficiency throughout China to invest for growth and deliver improved service to customers and consumers in a fast-changing marketplace."
The transition is subject to governmental approval. Before the bid, Coca-Cola owned a third of bottling operations. When complete, COFCO will own and operate 18 bottling plants, while Swire will own and operate 17 in mainland China.
In a press release, Swire Pacific commented that the purchase will 'improve efficiency, result in savings in distribution and general and administrative costs and permit faster and better aligned decision making,' due to the streamlined arrangement of operations across contiguous territories.
China is Coca-Cola's third largest market by volume, and the company plans to invest $4 billion for 2015-2017 growth, the company said.
In related news, Danone also divested itself of Chinese bottled water firm Robust Co. Ltd. last week and put its focus on selling Evian and other French mineral water brands in the country.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. To subscribe to ESM: The European Supermarket Magazine, click here.
