Schweppes sale threat to TBWA

TBWA GGT Simons Palmer has won the 3m account for Oasis, just after its owner Cadbury Schweppes has announced plans to sell its soft drinks’ brands to Coca-Cola for 1.6bn except in the US, South Africa and France.

The sale immediately puts a question mark over the Cadbury Schweppes UK marketing team, and the long-term future of the Cadbury Schweppes advertising accounts, including TBWA’s win.

Andrew Mann, GB marketing director for Cadbury Schweppes, says: “It’s business as usual and we will still need advertising for the Oasis brand.” A Coca-Cola spokeswoman says employees involved in brand franchising and the manufacture of concentrate will be offered jobs.

Cadbury Schweppes appointed Young & Rubicam to the 25m global Schweppes account in August. Y&R also handles the 50m Dr Pepper around the world. Foote Cone & Belding is the incumbent on Crush and Canada Dry. In the UK, media is handled by Zenith. Coca-Cola uses Lowe Howard-Spink, Publicis, Leagas Delaney, Bartle Bogle Hegarty and Mother as part of its extensive worldwide roster of agencies, with media in the UK handled by Universal McCann.

The deal – which Pepsi may oppose on anti-competitive grounds – is being seen as an admission that Cadbury Schweppes cannot compete in a global drinks market alongside Pepsi and Coca-Cola while being dependent on complicated distribution arrangements. It is understood that the company, which has a 15 per cent share of the US soft drinks market, had an average of three per cent in other markets with its brands, which include Schweppes, Dr Pepper, Crush, and Canada Dry mixers.

Tim Potter, food analyst at Merrill Lynch, says: “The deal gives Coca-Cola the opportunity to boost volume in the future with relatively profitable brands. There may be a fall-out of some of the smaller Cadbury Schweppes brands, such as Sunkist.”

Cadbury Schweppes is expected to change its name to reflect the fact that it will become primarily a confectionary company.

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