Business / Companies
Delta - Coca Cola bottling discussions progressing slower than expected
09 Nov 2017 at 11:46hrs | Views
Local beverage maker, Delta Corporation says discussions with Coca Cola Company's (TCCC) intention to terminate bottling of Coca Cola beverages are progressing slower than anticipated.
Delta is in discussions with TCCC so that it can continue producing Coca Cola beverages. This comes after Delta Corporation parent company SABMiller merged with AB InBev, a rival of the TCCC, in October 2016. AB InBev produces Pepsi beverages.
Following the merger, Delta lost its Coca Cola bottling rights and TCCC issued a cautionary on the imminent termination of the bottler's agreement.
"Shareholders are reminded that the Company is trading under a cautionary issued with respect to the notice received from The Coca-Cola Company (TCCC) advising of an intention to terminate the Bottler's Agreements with the Group entities (Notified Intention).
"This followed the merger of AB InBev and SABMiller Plc in October 2016 and the subsequent agreement in principle reached between TCCC and AB InBev to explore options to restructure the bottling operations in a number of countries. The discussions have progressed slower than anticipated," said Delta in a statement accompanying the group's financial results for the first half ended September, 30 2017.
In its financial statement, Delta Corporation recorded a 4 percent increase in after tax profit to the tune of $32, 2 million in the period under review.
Revenue stood at $250,1 million from $246,6 million in the same period driven by higher sales of lager beer.
The discussions have been ongoing for a year without yielding much. However, Delta is optimistic that it can close the issue in the 2018 financial year, now left with six months to end.
Delta is in discussions with TCCC so that it can continue producing Coca Cola beverages. This comes after Delta Corporation parent company SABMiller merged with AB InBev, a rival of the TCCC, in October 2016. AB InBev produces Pepsi beverages.
Following the merger, Delta lost its Coca Cola bottling rights and TCCC issued a cautionary on the imminent termination of the bottler's agreement.
"Shareholders are reminded that the Company is trading under a cautionary issued with respect to the notice received from The Coca-Cola Company (TCCC) advising of an intention to terminate the Bottler's Agreements with the Group entities (Notified Intention).
"This followed the merger of AB InBev and SABMiller Plc in October 2016 and the subsequent agreement in principle reached between TCCC and AB InBev to explore options to restructure the bottling operations in a number of countries. The discussions have progressed slower than anticipated," said Delta in a statement accompanying the group's financial results for the first half ended September, 30 2017.
In its financial statement, Delta Corporation recorded a 4 percent increase in after tax profit to the tune of $32, 2 million in the period under review.
Revenue stood at $250,1 million from $246,6 million in the same period driven by higher sales of lager beer.
The discussions have been ongoing for a year without yielding much. However, Delta is optimistic that it can close the issue in the 2018 financial year, now left with six months to end.
Source - Takudzwa Chiwara
