ECONOMY

Coca-Cola HBC to expand into more countries, developing markets

After snapping up five water bottlers in just over a year, Greece’s Coca-Cola HBC wants to expand this business further and may look to Italy for new opportunities, its chief executive said yesterday. Doros Constantinou also told Reuters in an interview the company had no plans to move into new countries, such as Germany, pouring cold water on speculation it could acquire German bottler Coca-Cola Erfrischungsgetraenke AG (CCEAG). «We are present in 26 countries and, at this moment, I don’t think adding number 27 to our portfolio would be the right thing to do,» he said. «No one has offered us any stake, but right now we are not interested in Germany,» he added, referring to CCEAG. CCHBC is the world’s third-largest bottler of the Coca-Cola Co’s soft drinks by volume. The US giant has a 24 percent stake in its Greek namesake. «We already have quite a big portfolio and the growth opportunities of those countries are huge. We want to exhaust those opportunities and then start looking outward,» Constantinou said. One of the growth areas is the table and mineral water business, and the Greek firm has bought bottlers in Switzerland, Romania, Poland, Austria and Croatia over the last 16 months. «Expanding into the water business is very important, as it still has a lot of room for growth… The water keeps on running,» he said. He indicated that Italy, the country with the highest consumption of bottled water in Europe, was on the company’s radar screen, but stressed that there were no specific plans yet. «The Italian water market is a market where we don’t have any presence yet and, of course, we are looking into this issue. We have our eyes open and are looking into various options but there is nothing on the horizon yet,» he said. Last week, the company said its 2003 net profit had more than tripled to 115 million euros ($146.6 million) on sales of 4.06 billion euros and forecast a further rise of up to 30 percent in net income this year. The Greek firm has said it expects a moderate rise in sales during the Athens Olympic Games in August, though with little impact on its overall results. CCHBC expects volume to grow by 6 to 8 percent, mainly due to growth in its emerging and developing markets segment, which includes eight former communist states joining the European Union on May 1 as well as Russia and EU hopefuls Romania and Bulgaria. Constantinou said EU enlargement should bring the long-term benefits of a large borderless market but that, in the near term, it would bring an increase in some costs. «The main difficulty we have to cope with, due to the accession of those eight countries, are price hikes in some commodities such as sugar, which is regulated by the EU.» He said the company had included an extra cost of 15 million euros for sugar in its 2004 guidance. Constantinou ruled out offering stockholders a share buyback and said the company would stick to its policy of the past years of increasing the dividend by about a cent every year.