News briefs: S&N sale, Coca-Cola and Britvic

By Neil Merrett

- Last updated on GMT

Related tags Coca-cola

In what is proving a busy week for the beverage business, Scottish
& Newcastle may be bought out by a consortium of rival brewers,
while profitability is up for soft drink manufacturers the
Coca-Cola Co. and Britvic.

Carlsberg and Heineken Target S&N After months of speculation over the future of beer group Scottish & Newcastle (S&N), two of Europe's largest brewers today announced that they are involved in discussions over forming a consortium to purchase the UK-based company.

In a joint statement, Heineken and Carlsberg said that should a deal go ahead, they intended to split the group's regional operations between themselves.

Under the current plan, Heineken would therefore control S&N's Western European operations, including the UK market, while Carlsberg would claim full ownership of the Baltic Beverages Holding (BBH) division, which operates in Eastern Europe.

Currently, BBH is jointly owned by S&N and Carlsberg.

The ongoing success of the venture has led to mounting speculation that Carlsberg may try and acquire its partner in BBH.

The consortium said that no formal approach had as yet been made to S&N about the proposed deal, which would allow them to obtain a number of leading beer and cider brands including Baltika, Foster's, Kronenbourg 1664, Strongbow and John Smith's.

However, the board of S&N was quick to issue a statement suggesting that any move to split its operations would not be welcome by the company.

"S&N is confident in its future as an independent group with a combination of strong growth in emerging markets and cash generation in developed markets," the group stated.

Coca-Cola counts benefits of global expansion The Coca-Cola Company's revenues were up 19 per cent for the third fiscal quarter to $7.6bn due to the continued international growth of its operations.

Operating profit rose by 10 per cent to $1.8bn for the three-month period ending 28 September, though operating margins declined by about two percentage points to 24 per cent over the same period last year.

Group chairman and chief executive officer Neville Isdell said the group's presence in a number of international markets, as well as a turnaround in its North American operations were the key factors driving growth over the period.

"Emerging market growth, combined with sequential improvement in North America , resulted in our third consecutive quarter of 6 percent unit case volume growth," he stated.

Isdell added that while sales of its carbonated soft drink brands continued to grow, non-carbonated alternatives continued to dominate the group's growth prospects.

"Global sparkling [carbonated] beverage volume growth remained robust at 4 per cent, and still beverages increased 14 per cent as we focused on the highest value opportunities around the world," he stated.

To ensure further growth over the remainder of the year, the company said, that it would continue to push its key brands globally, while also stepping up innovation and cost efficiency both in its own operations and through regional bottlers.

Britvic growth bolstered by key brands Britvic, one of the UK and Ireland's leading soft drink manufacturers, claims to have defied the affects of unfavourable weather conditions to lift full year profitability for its operations.

In a trading statement released today, the company said that revenues for the 52-week period ending 30 September were up by 3.7 per cent to £705m (€1bn) over the same period last year.

The company attributed the growth to a 3.9 per cent increase in sales of its still drinks and a three per cent gain in its carbonated beverages.

The group, which distributes some Pepsi beverages like 7UP, said the brands were partly responsible for significant growth in carbonated sales volumes.

In the still drinks category, the J2O brand of juice and Robinsons also posted sales improvement, the company said.

The figures exclude any contribution from the group's recent acquisition of C&C group's soft drink division, Britvic said.

Group chief executive Paul Moody said the performance would ensure the company would remain on track to achieve its full year profit expectations.

"We have continued to deliver on our strategy of improving average realised price and managing cost, and consequently we expect to at least deliver our ambition of increasing operating profit margin by 10 to 15 basis points," he stated.

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