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Coke implements 21st century beverage partnership model with US bottlers

DBR Staff Writer Published 17 April 2013

The Coca-Cola Company has partnered with five US-based bottlers to implement its 21st century beverage partnership model in the US as part of its 2020 Vision.

Under the partnership, Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Company United, Swire Coca-Cola USA, Coca-Cola Bottling Company High Country and Corinth Coca-Cola Bottling Works will be granted new, expanded territories.

Coca-Cola Consolidated will assume territories in Tennessee, including the Knoxville market and in Kentucky, including the Louisville and Lexington markets.

Coca-Cola United will assume territories in Alabama, including the Montgomery market, and portions of northwest Florida, north and west Georgia and southeast Tennessee.

Swire Coca-Cola will assume territories in the Denver and Colorado Springs, Colorado markets.

Coca-Cola High Country will assume territories in the Sheridan, Wyoming and Billings, Montana markets.

Corinth Coca-Cola will assume territories in the Jackson and Paris, Tennessee markets to expand its presence in west Tennessee.

The Coca-Cola Company chairman and chief executive officer Muhtar Kent said that the company is accelerating the transformation of their US system which will establish a clear path to achieve 2020 Vision.

"What began with the acquisition of Coca-Cola Enterprises' North American operations in October 2010 continues with the steps we are announcing today. These actions are being taken ahead of our previously stated timeline," Kent added.

"The result will be further progress toward a more agile, modern, customer-focused franchise business partnership model unique to the United States."

As the model continues to evolve, transactions might include an outright territory sale, a territory swap, or a sub-bottling arrangement.

Plans to implement in the new and existing territories include more rational and contiguous operating territories; a grant of territory rights and the sale by Coca-Cola Refreshments of distribution assets and cold drink equipment.

To support future implementation of a national product supply system, production assets will remain with Coca-Cola Refreshments through a finished goods model; and an integrated information technology platform will be deployed.

Coca-Cola Americas president Steve Cahillane said: "This new architecture that we are beginning to implement ensures a meaningful role for current and future aligned bottling partners in the U.S."

The transactions are expected to close during 2014, subject to the parties reaching definitive agreements by the end of 2013.