News briefs: Cott, S&N and Gatorade
S&N is finally split up by its new owners and Gatorade is
reportedly facing stiff competition within its domestic US market.
Cott posts profit fall Cott, a leading supplier of private label soft drinks, posted a 2.6 per cent fall in revenues during the first quarter of 2008 to $400.2m, despite implementing price increases. Operating income for the group was posted as a $21.1m loss for the 12 months ending 31 March, as ingredient and packaging expenses saw operating margins fall by about seven percentage points to -3.1 per cent. Group interim chief executive officer David Gibbons said that while increased pricing had help reduce the impact of losses during the year, earnings were not up to expectations as an expected turnaround in its US operations had yet to occur. "The Board of Directors has made some tough but necessary changes that our disappointing results called for; we must improve our execution to accelerate the turnaround of the U.S. business," he stated. In order to ensure a turnaround in the performance, Gibbons added that the group was implementing new cost cutting strategies to ensure it remained a low cost beverage manufacturer. "During the quarter, Cott made solid progress on the installation of the new water production lines," he stated. "We expect to begin production by the end of the second quarter." S&N split completed Carlsberg and Heineken have today announced that they have finally completed the acquisition of brewer Scottish & Newcastle (S&N), significantly strengthening their presence within the European beer market. In a joint statement posted on the S&N website, the brewers said that both companies had now acquired their respective operations from the company, as agreed as part of their cooperation. Under these terms, Heineken and Carlsberg decided to split S&N's assets, with the former, as planned, acquiring full control of the profitable Baltic Beverages Holdings (BBH) joint venture. Carlsberg said that BBH, which it had operated jointly with S&N since 2004, was a "key growth asset" due to its dominance in major markets such as Russia. The company will additionally take control of S&N's French, Greek, Chinese and Vietnamese operations. For its part of the deal, Heineken will gain S&N's UK, Irish, Portuguese, Finnish, Belgian, US and Indian operations in a move it says will provide undisputed leadership in European beer production. The group will, as a result add a number of leading brands such as Strongbow cider and Newcastle Brown Ale to its portfolio. Although the S&N website will still remain in operation, both Heineken and Carlsberg said this was simply as a record of the former group's dealings. "This website will remain active for an interim period as an archive of S&N's history," the brewers stated. "In future to find out what is happening in the S&N businesses please visit the Heineken and Carlsberg sites or go to the local business websites." Just like its own website homepage, S&N, once the largest UK-based brewer, is now a relic of the past. Gatorade faces tougher competition, says report The Gatorade brand is finding it increasing difficult to compete within the US sports 'hydration' market amidst a growing competition, according to press reports. The brand, which is produced via the PepsiCo-owned Quaker group, accounted for 82 per cent of the category in 2007, a fall of 11 per cent from twenty years ago, according to United Press International, which itself cited Crain's Chicago Business. While the brand was found to be gaining business from its regular customers, it was still losing sales to other brands, according to the report.
