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Coca-Cola signs letter of intent to grant additional bottling territory to Swire Coca-Cola

DBR Staff Writer Published 23 February 2016

Coca-Cola intends to grant additional territories to Swire Coca-Cola, USA which include cities such as Seattle, Spokane, Wash., Portland, Oregon, and a wide area of the Pacific Northwest.

Swire Coca-Cola, USA, a subsidiary of Swire Pacific Limited's Beverages Division, has signed a letter of intent with The Coca-Cola Company for Swire to expand its existing territories in the United States to include parts of Washington, Idaho and Oregon and to acquire cold-fill production facilities in Bellevue, Wash., near Seattle, and in Wilsonville, Ore., near Portland.

The letter of intent is part of Coca-Cola North America's ongoing and accelerated implementation of a 21st Century Beverage Partnership Model, a broad initiative aimed at building on system capabilities to sustain success.

Swire Coca-Cola, USA, President and CEO, Jack Pelo said "We are delighted to sign this letter of intent with The Coca-Cola Company."

"This latest grant of additional territory rights, following on from the agreements to expand our territories in Colorado and Arizona, underscores the important role Swire is playing in The Coca-Cola Company's refranchising initiatives in North America."

Coca-Cola North America, president, J. Alexander "Sandy" Douglas Jr., "Swire is a great partner, and we are excited at this proposed further expansion of their U.S. territories in the Coca-Cola system."

"We're also pleased that the overall refranchising process is going very well in North America."

The Company has also reached a Definitive Agreement with Great Lakes Coca-Cola Distribution, L.L.C., a Reyes Holdings company based in Rosemont, Ill., for additional territories in Wisconsin, Minnesota, Illinois, Michigan and Iowa. A letter of intent for these territories was previously announced.

The Coca-Cola Company began working with its bottling partners a decade ago on plans to develop a model that evolves the system to serve the changing customer and consumer landscape, with a focus on creating stronger system alignment.

A critical step was the Company's acquisition of the North American territories of Coca-Cola Enterprises in 2010.

In the five years since the deal was closed, The Coca-Cola Company has accelerated the implementation of the new model by strategically addressing the bottling system, customer service, product supply and a common information technology platform.

Ultimately, the Coca-Cola system in North America will be comprised of economically aligned bottling partners that have the capability to serve major customers, coupled with the ability to maintain strong, local ties across diverse markets in the United States and Canada.

So far, the Company has reached definitive agreements or signed letters of intent to refranchise territories that account for approximately 45% of bottler-delivered distribution volume in the United States.

The new transactions announced today are subject to The Coca-Cola Company and Swire Coca-Cola, USA reaching definitive agreements.

The parties are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and system associates. Financial terms are not being disclosed.

Source: Company Press Release