Coca-Cola May Sell 9 Bottling Plants in the US

The Coca-Cola Company announced the formation of a new National Product Supply System (“NPSS”) in the United State on September 24, 2014.

The mission of the NPSS will be to facilitate the operation of the U.S. product supply system for Coca-Cola bottlers.

Under the new NPSS, three existing independent producing bottlers, Coca-Cola Bottling Co. Consolidated (“Consolidated”), Coca-Cola Bottling Company United (“United”), and Swire Coca-Cola USA (“Swire”), as well as the Company-owned Coca-Cola Refreshments (“CCR”)along with Coca-Cola North America, will be members of Coca-Cola’s National Product Supply Group (“NPSG”). The NPSG will administer key national product supply activities for these NPSS bottlers, which currently represent approximately 95 percent of the U.S. produced volume.

Under the initial terms of the Letters of Intent, it is anticipated that each NPSS bottler will acquire certain production facilities from CCR within their transitioning distribution territories.  Initially, it is contemplated that CCR will divest the following nine production facilities with an estimated net book value of $380 million:
•Consolidated will acquire production facilities in Sandston, Va., Baltimore and Silver Spring, Md., Indianapolis and Portland, In. and Cincinnati, Oh.
•United will acquire the production facility in New Orleans, La.
•Swire will acquire production facilities in Phoenix, Az. and Denver, Co.

The transition of these production facilities from CCR to NPSS bottlers is anticipated to take place between 2016 and 2018.  The sale of additional production facilities from CCR to NPSS bottlers in previously announced transitioning distribution territories will be considered in due course.  CCR’s territories will continue to be refranchised as previously announced and decisions on any remaining production facilities in those territories will also be considered at that time.  

The new transactions announced are subject to the parties reaching definitive agreements. The parties also announced that they are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and workers.

The IUF is concerned that this new structure in the United States may lead to organizational change and restructuring.  We would like to urge affiliates in the US that are organized in Coca-Cola to inform us of any changes or effects on the employment or unions' positions that will be caused by the formation of a new National Product Supply System. Please send the relevant information to burcu.ayan@iuf.org.