US parent buys back Coke operations in PH
The Coca-Cola Co. said that its Bottling Investments Group (BIG) plans to take over bottling operations in the Philippines, but did not explain the factors that played behind the decision.
In a statement on Friday, the company said the acquisition would still be subject to “regulatory approvals.”
Half a decade ago, Coca-Cola Femsa, the biggest franchise bottler of Coca-Cola products in the world, bought a 51-percent stake in Coca-Cola Bottlers Philippines Inc. from The Coca-Cola Co. in Atlanta.
During that time, it marked Mexico-based Coca-Cola Femsa’s first acquisition beyond Latin America which it then called “a vote of confidence in the strength of the Philippine economy and the opportunities it provides.”
Now, that stake has been returned to The Coca-Cola Co. at an undisclosed amount, after the board of Coca-Cola Femsa voted to exercise an option to sell back its 51-percent stake.
No explanation was given. However, according to the company’s official website, it said Coca-Cola usually relied on independent bottling franchises, except in certain “circumstances” wherein BIG had to enter the picture.
Article continues after this advertisement“For a variety of reasons, circumstances arise where bottling franchises find they need help that is beyond their capability,” it read.
Article continues after this advertisement“[BIG] was created to ensure those bottling operations remain a part of our system and receive the appropriate investments and expertise to ensure their long-term success,” it added.
John Murphy, president of the Asia Pacific Group for The Coca-Cola Co., said that they appreciated Coca-Cola Femsa’s decision and the progress made during their five-year tenure in the Philippines.
He said the company was confident in the potential of the market, noting that it was “better positioned than ever before for future success.”
“The Coca-Cola Co. will work to ensure a smooth transition of the Philippines bottling operations to BIG, for all customers, business partners, consumers and, importantly, for all those who work in the bottling operations,” he said.
This develops at a time when the beverage maker industry faces excise taxes for its products on top of sugar supply constraints, which have reportedly partly affected company operations.
