Coca-Cola to end Schweppes links

Cadbury Schweppes may be badly damaged if Coca-Cola pulls the plug on CCSB joint venture

Coca-Cola is understood to be on the verge of ending its nine year distribution relationship with Cadbury Schweppes in a move which could see the end of CCSB.

Sources close to the company say that the move will follow a decision in the US this week by Coca-Cola Enterprises to stop distributing three of Schweppes’ brands in the US – Sunkist, A&W Root Beer, and Welch’s fruit juices.

The move could have a damaging effect on Cadbury Schweppes soft drinks operations in the UK. CCSB, which has an annual marketing budget in excess of 100m, is a joint venture company, 51 per cent owned by Cadbury Schweppes with Coca-Cola picking up the remainder.

“It is no secret that the relationship between Coca-Cola and Cadbury Schweppes has been sour for a long time,” says one inside source. “Coca-Cola is not happy that it does not directly control its brands in the UK. It makes no sense that some of their brands are in direct competition, like Fanta and Schweppes’ own Sunkist.”

An industry observer says: “Everything would go bell-shaped for Schweppes. It sells a lot of its brands to retailers on the back of Coca-Cola. When that link goes, their brands would have to stand alone, and they are not that strong.”

However, a Coca-Cola spokeswoman denies that moves in the US will be repeated in the UK. “We are closer to CCSB than ever. With the European Championships this summer, a busy promotional period is approaching,” she says. “This is not the time for changes.”

Recommended

Working on a Sunday can be risky Business

Marketing Week

Agency boss Paul Simons received a call from Tom Rubython, editor of soon-to-be launched Sunday paper, Sunday Business. Ruby asked if Simons would contribute a monthly column on the advertising industry to the paper. Simons gave the offer some thought, but turned it down – after all, his agency handles advertising for News International newspapers […]

Roman Catholic Church approves licences for Millennium 2000 logo

Marketing Week

The Roman Catholic church is selling licences to global companies for a Millennium 2000 logo, which will be approved by the Pope. The pontiff will choose a winning design next month, licensed by the Roman Catholic Church and administered by the Jubilee Committee in Rome. The Jubilee Committee, an international organisation comprising different religious groups, […]