The Coca-Cola Company is believed to be eyeing Australia for the expansion of its share of the non-carbonated drinks market. A deal between Coca-Cola and La Tondena, the water and fruit juice arm of San Miguel Corp (SMC), has yet to be finalised, but it appears that the US giant will soon gain control of La Tondena’s non-alcoholic brands, which include Viva! water and orange juice Royal True.
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Importantly, the brands seem likely to be licensed to Coca-Cola Bottlers Philippines Inc (CCBP), currently owned by Australian company Coca-Cola Amatil (CCA) but the subject of a long running buyback attempt by SMC. Sources maintain however that this deal, which is due to go before CCA shareholders in April, has nothing to do with the La Tondena brands, and is not an attempt to get Coca-Cola involved with CCBP buyback.
Coca-Cola has had little impact on the Australian fruit juice market to date, and is now believed to be considering several acquisition targets, for example Berri Ltd, unofficially for sale for nearly twelve months now.
The beverage giant has had more exposure to the bottled water market, with the 37% owned Mt Franklin brand, and last year it launched the Pump brand.
Non-carbonated drinks have been a focus of Coca-Cola since a new growth strategy was outlined by Doug Daft shortly after his appointment as CEO last year. Plans have been widely discussed to expand into juice, bottled water, milk and iced tea/coffee. The Australian market is likely to prove particularly attractive because the Australian Competition and Consumer Commission (ACCC) proved during a 1999 proposal that Coca-Cola acquire Cadbury Schweppes soft-drink brands, that it considers the different drinks to be separate markets, thus eliminating competition problems that may block further acquisitions.
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