Sunday, April 8, 2007

Coke goes after the real, real thing - alcohol

Soft drinks giant Coca-Cola plans to sell an alcoholic range of drinks in New Zealand.

The announcement is worrying alcohol watchdogs, particularly when Coke already has such a huge appeal for the youth market. Coca-Cola Amatil announced yesterday it wanted to broaden its range into the profitable alcoholic beverages market. It has big ideas, having set its sights on being the third biggest beer maker in Australia in the next five years. Spirits and alcoholic "ready-to-drinks" were also tipped as probable additions to the range.

The market is currently dominated by Lion Nathan, DB Breweries and Independent Liquor, the "alcopop" specialist founded by the late Michael Erceg that sold for $1.26 billion in December. The sector is highly lucrative, with take-home liquor market worth more than $1 billion. Alcohol Healthwatch director Rebecca Williams said any Coke branding on the alcohol range would be a huge concern. She said the company had marketing clout and proved it could build a massive following.

"If there is any link at the consumer end with a brand or a logo that would raise concerns because Coca-Cola is a very popular brand and a popular drink among young people." Advertisement Advertisement She said the company's entry into the market could increase competition and cause liquor companies to increase their promotion. Coca-Cola Amatil group
managing director Terry Davis spoke of the plans at its 2007 Strategic Review. "CCA will take a fundamental change in the direction for the Australian and New Zealand businesses, shifting from aiming to provide our customers and consumers with a non-alcoholic beverage for every occasion to a beverage for every occasion," he said.

The company began expanding its business into food and non-carbonated drink six years ago. Revenue from non-carbonated drinks has grown from 5 per cent to 32 per cent. Mr Davis said the Australian beer market was worth more than $1.13 billion a year, making it one of the most profitable in the world. "We are aiming to become the clear number three player in the Australian beer market by the end of 2012."

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