IUF | Coca-Cola Workers Network | Monthly : July 2007

LATIN AMERICA: FEMSA TO BUY Brazilian bottler from Coca-Cola AND to invest in distribution center in ARGENTINA

Mexican Coca-Cola bottler FEMSA is to buy a wholly owned Coca-Cola franchise in the Brazilian state of Mina Gerais for $380 million. FEMSA, which intends to further expand its Latin American operations, will also build a $60 million distribution center in Buenos Aires, Argentina, in an area currently belonging to the city Central Market.

Para leer un artículo en Español sobre la nueva franquisia en Brasil chasque aquí.

Para leer un artículo en Español sobre el nuevo centro de distribución en Argentina chasque aquí.

The Brazilian production centre has a current production capacity of about 100 million cases. The transaction is expected to be completed in the first half of 2008. The building of the distribution centre in Argentina is scheduled to be completed in the next six months and will entail a centralization of FEMSA operations in the capital.
Coca-Cola FEMSA is the biggest bottler of Latin America with operations in Mexico and 31 bottling plants in Guatemala, Nicaragua, COsta Rica, Colombia, Venezuela, Brazil and Argentina.

Coke to buy stake in S.Korea bottling unit: source

SEOUL (Reuters Wed Jul 25) - Coca-Cola Co. has agreed to take part in LG Household & Health Care's acquisition of the South Korean bottling arm of Australia's Coca-Cola Amatil Ltd. a source familiar with the deal said on Wednesday.

The U.S. beverage giant will take a 10 percent stake in the South Korean business of Coca-Cola Amatil, which South Korea's LG Household agreed to buy for $445 million-$467 million early this month, the source told Reuters.

LG Household, which has said it hope to sell part of shares in the newly acquired unit to Coca-Cola to help secure basic liquids, will retain 90 percent, the source added.

LG declined to comment.

Growth had been slowing in Amatil's South Korean business as more consumers turn to healthier, sugar-free drinks, but it boasts of strong distribution networks to major restaurants and retail chains in the country.

Coca-Cola controls 48 percent of South Korea's soft drinks market but lost volume following a recall of Coca-Cola bottles in July 2006 after a criminal poisoning case.

UK: Coverage of the CCE strike

More than 100 workers joined the picket line setup at the front entrance of Coca-Cola Enterprises Wakefield plant since 7am of yesterday, 26 July. UNITE-Amicus workers were joined today, 27 July, by 140 of their GMB colleagues now picketing CCE's Milton Keynes plant for 24 hours.

AMICUS / UNITE Convener Steven Tattersall, 38, is a technician and has worked at CCE Wakefield for 13 years. ``A lot of these guys have been here since the site opened in 1989. The technicians are just fed up of taking lower than inflation raises.....

....They have a lot of pride in their jobs and the company, but the attitude of the company is changing the attitude of the workers here. They are frustrated with the management for making them feel that way. A lot of staff feel as if they are not valued any more. People's standards of living have dropped.''

Technician operative Darren Stead, 30, who has worked at the site for five years, said: ``We are not asking for much, we are just asking for the going rate to keep our heads up. This is a last resort being here. We love what we do, we just feel it has been a bit of a kick in the teeth what we have been offered.''


Alan Costello, GMB Organiser said, "A pay increase of 2.5% is not enough frankly. GMB members want the December 2006 which was 3.8%. GMB and other unions have been in talks with the Coca Cola since January and the company has not moved so they can hardly by surprised that the members are at the end of their patience and determined to show the company that they want a proper pay raise and that they want it now. GMB is available at anytime to attend talks with the company that will advance the situation."


Unite Regional Secretary, Davy Hall said: "Given that Coca Cola Enterprises make significant profits, we are not prepared to see our members' wages cut. Their hard work has delivered the profits for Coca Cola Enterprises. Their mortgages, gas bills and council tax have all increased but their pay has fallen flat. This is the first 2 days of strike action. We are prepared to reopen negotiations to help resolve the dispute but our members are also adamant that the dispute could well escalate."

Regional officer Kelvin Mawer, who takes part in negotiations with Coca Cola, said it was unfair to ask workers to sacrifice overtime rates. "Some of the lads leave here near exhaustion at the end of a 12-hour shift. When they do get overtime they want it at one and a half time. The 2.5 percent is a derisory offer," he said. "The workers just want to maintain their standard of living,"


UK: Coca-Cola Workers on Strike





Workers at the Coca-Cola Enterprises (CCE) Wakefield plant in the UK walked off the job today to launch a 48-hour strike. CCE workers at Wakefield, organized in the Amicus section of Unite, have been refusing overtime since July 24. A second strike is scheduled for August 13-14. Coca-Cola workers at the CCE Milton Keynes plant, represented by the GMB, plan to join the strike on July 27.

The strike actions are a response to the company's refusal to negotiate an improved pay offer. CCE's proposed 2.5% increase in wages, packaged with partial cuts in overtime compensation rates and worker bonuses, represents a pay cut in real terms for staff, against a background of improved sales, profits and stock market performance.

Workers at both sites overwhelmingly voted for industrial action on July 6. The strike, coming in the summer peak season, will affect supplies of Coca-Cola, Oasis, Dr. Pepper, Sprite and other CCE products sold at retail outlets, supermarkets, vending machines, pubs and hotels.

Wakefield is one of the world's largest bottling and distribution centers, producing 6,000 cans and 1,650 bottles of Coca-Cola products every minute with 580 workers. Milton Keynes, which counts 215 workers operating eight production lines, is the CCE's second largest UK producer. CCE is the world's largest Coca-Cola bottler, with operations is North America, Belgium, France, Luxembourg, Monaco and the Netherlands.

The IUF and its European organization EFFAT are coordinating support for the UK action among affiliates with membership in Coca-Cola.



FLAI-CGIL's Regional Secretary Wanda Vallettini denounced the unacceptable conditions the about 60 Coca-Cola HBC workers - vending machine and sales operators - in the Italian region of Liguria are enduring. Forced to work up to 11 hours a day (instead of the regular 8 as per CBY) to reach impossible targets such as minimum number of visits or case sold per day - on which their bonus pay depends.

CCHBC workers are also subject to threats and intimidation. "Their work is object of judgements that insult their dignity, undermine self-esteem, create unsatisfaction and lead to an amazing number of psycological issues".

FLAI-CGIL cannot understand how CCHBC was named "3rd better workplace" in Italy a few months ago in a survey which was given major national media coverage. "Managers and supervisors often address employees with insults and swearwords. There are also frequest cases of workers forced to take leave or dismissed without a clear justification". After several months spent attempting to open a dialogue with the company on this situation, FLAI-CGIL finally managed to get the company to agree on a meeting scheduled for next week where these issues will be discussed.

UK: CCE workers prepare to strike



Workers at the Coca-Cola Enterprises (CCE) Wakefield and Milton Keynes plants in the UK are getting ready for industrial action. In Wakefield, workers and their union Unite (Amicus section) plan to stage two 48-hour strikes on 26-27 July and 13-14 August. Workers will also begin a overtime ban on 24 July. In Milton Keynes, workers represented by the GMB plan to be on strike on 27 July.

To read the latest press release from the Amicus Section of UNITE click here.

To read the latest press release from the GMB click here.

The decision to strike comes after the company's refusal to improve a below-inflation 2.5% pay offer coupled with cuts to parts of overtime compensation rates and worker bonuses. CCE's offer represents a pay cut in real terms for its staff, despite the company significant profits and stock market performance.

On July 6, workers at both sites overwhelmingly voted in favour of industrial action, which threatens supplies of Coca-Cola, Oasis, Dr. Pepper, Sprite and other CCE products in the summer peak season. Retail outlets, supermarkets, vending machines, pubs and hotels will be affected.
Wakefield is one of the world's largest bottling and distribution centres, producing 6,000 cans and 1,650 bottles of Coca-Cola brands every minute with 580 workers. Milton Keynes counts 215 workers operating eight production lines and are the second largest producer within CCE in Great Britain.

CCE has four other sites in Britain (Sidcup, Edmonton, East Kilbride and Colwall) as well as a network of external suppliers. It employs 4,600 people in its UK factories, depots and office sites. CCE is also world's largest Coca-Cola bottler, with operations is North America, Belgium, France, Luxembourg, Monaco, and the Netherlands.

Coca Cola to build $10.4m regional headquarters in Nairobi

Soft drink giant Coca Cola is finally putting up a Ksh700 million ($10.4 million) headquarters building to oversee its operations in 27 East and Central African countries, after years of shuffling its regional offices.

The Nairobi office is responsible for Angola, Botswana, Burundi, Comoros, Congo Brazzaville, Democratic Republic of Congo, Djibouti, Ethiopia, Eritrea, Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mayotte, Mozambique, Namibia, Reunion, Rwanda, Seychelles, Somalia, St Helena, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

The ground breaking ceremony in Nairobi’s Upper Hill area was led by Kenya Vice President Moody Awori and Nathan Kalumbu, Coca Cola’s president and chief executive for Coca Cola East and Central Africa.

Mr Kalumbu said the new headquarters will end the perennial problem the organisation has faced of having its operations housed in three different buildings in the Kenyan capital. This has adversely affected fast decision making and collaboration.

Some of our employees are housed at the Old Mutual Building in the Central Business District, another group is at Britak Centre, and the third is at Symbion House, next to Don Bosco Catholic Church. This has proved to be a real challenge in terms of teamwork and rental costs among others,” said Mr Kalumbu. “So we undertook to find a way of consolidating our employees into a single building in order to improve productivity and teamwork as well as contain the rising costs arising from working separately.”

Coca Cola has had a presence in Africa since 1928, when its first bottling plant was established in Johannesburg. In the rest of Africa, Coca Cola, the soft drink, was first produced after the Second World War. The business has been continually expanding ever since.

With its track record in marketing innovation, Coca Cola’s proposed new head office is a vote of confidence in the newly expanded East African Community with its population of over 110 million people.

“Over the last eight months, our building consultants and ourselves have worked extremely hard to develop the new building design that we have, because we knew it highlights our tremendous strengths in these markets, as in many others, in a strategic and compelling way. It is the key to fulfilling our collective vision for a brighter and more prosperous business,” he said.

The building is expected to be complete by June 22, 2008, a year from the ground breaking.
The EastAfrican

Korea: CCKBC buyer may sell shares to TCCC

As Coca-Cola Amatil (CCA) finalizes the deal to sell Coca-Cola Korea Bottling Co. (CCKBC) to LG Household & Health Care Ltd. for $445-$467 million, LG Household has said it is planning to sell some shares in CCKBC to TCCC. TCCC already owns 35% of CCKBC.

LG hopes to sell C-C Amatil unit shares to Coca-Cola
REUTERS Fri Jul 6, 2007

SEOUL, July 7 (Reuters) - LG Household & Health Care Ltd. which agreed to buy Coca-Cola Amatil Ltd.'s South Korean business, said on Saturday it hoped to sell part of shares in the newly acquired unit to Coca-Cola Co.

Amatil, 35-percent owned by Coca-Cola, said on Friday it had agreed to sell its Korean unit to LG for A$520-A$545 million ($445-$467 million), including debt.

South Korean online news provider EDaily quoted an LG source as saying later in the day that the company was planning to sell some shares in the unit to Coca-Cola, once the deal closed, to secure basic liquids from the U.S. company.

"Once the acquisition is completed and Coca-Cola wants such a deal, we can consider selling part of the shares," said a spokesman at LG Household. "We have sought investment by Coca-Cola from the very initial stage."

Growth had been slowing in Amatil's South Korean business as more consumers turn to healthier, low-sugar drinks. Coca-Cola controls 48 percent of South Korea's soft drinks market but lost volume following a recall of Coca-Cola bottles last July after a criminal poisoning case.

Amatil and LG expect to close a deal in three months pending continuing negotiations. Analysts expect the deal would give LG a distribution network for its beverage business.

UPDATE 3-LG Household to buy Coca-Cola Amatil Korea unit

REUTERS Fri Jul 6, 2007

By Jane Williams

SYDNEY, July 6 (Reuters) - Australian soft drinks firm Coca-Cola Amatil Ltd. said on Friday it has agreed to sell its Korean business to LG Household and Health Care Ltd. <051900.KS>, for less than it hoped but more than analysts had expected.

Amatil, 35 percent-owned by Coca-Cola Co. , said the price would be in a range of A$520-A$545 million ($445-$467 million) range, including debt, and it expects the deal to be completed in three months pending continuing negotiations.

Amatil had said it wanted to get around A$700 million for the unit, its book value, but analysts had said that was unlikely and saw the price announced on Friday as better than expected.

"This is a better price than a lot of people were looking for," ABN Amro Asset Management analyst Matthew Hoult said.

"It's below what the company was talking about publicly but a good price for what has been a disappointing business in terms of return on capital," he said, adding he would have been happy to have seen it sold for as little as A$200 million.

In a separate statement, LG Household said it expected the final price to be around 400 billion won ($433.9 million).

"Excluding debt, we expect the price to come to about 280 billion won," said LG, which is seeking to expand its beverage unit and diversify from its main businesses of household products and cosmetics.

If completed Coca-Cola Amatil will record a loss on book value of A$25-A$50 million. It bought the business in 1998 for US$461 million.

Meanwhile, South Korean online news provider EDaily quoted an unnamed LG official as saying that the company was planning to sell some shares in the newly-acquired unit to Coca-Cola once the deal closed, to secure basic liquids from the U.S. company.

But LG Household spokesman said they could not immediately confirm the report.

Coca-Cola Amatil shares, which traded up 1.8 percent ahead of the announcement, closed up 0.2 percent at A$9.21 in a lower overall <.AXJO> market. The stock is up about 19 percent so far this year, outpacing a 12 percent rise on the benchmark index.

LG Household shares gained 0.4 percent while the broader market index <.KS11> was up 0.7 percent. LG Household's shares have risen 13 percent in the year to date, while the KOSPI index is up 25 percent.

Growth had been slowing in Amatil's South Korean business as more consumers turn to healthier, low-sugar drinks. Coca-Cola Amatil earned A$18 million in 2006 in South Korea, up from a loss of A$9.2 million a year earlier and helped by a A$7.5 million profit on the sale of properties.

Coca-Cola controls 48 percent of South Korea's soft drinks market but lost volume following a recall of Coca-Cola bottles last July after a criminal poisoning case.

Chang Jung-hoon, analyst at Samsung Securities, said the price for LG was much lower than had been discussed and the deal would give LG a distribution network for its beverage business.

"Having a solid retail network would allow LG's lines of teas and health drinks to become a revenue source," Chang said.

"LG management doesn't seem fazed by Coca-Cola's past problems in South Korea as it believes its beverages and its marketing will be a better fit with the Korean market."

South Korea's SPC Group, parent of Samlip General Foods <005610.KS>, had also bid for the business. ($1=1.168 Australian Dollar) ($1=921.8 Won)

UK: CCE Wakefield Workers Vote to Strike



On July 6, Coca-Cola Enterprise workers at the Wakefield plant (West Yorkshire) voted to strike over the company's intransigence to move its wage increase offer up from 2,5%. The strike would imply a serie of 24h work stoppages starting on July 16 - unless a breakthough in negotiations occurs - and was voted by 82% of the 517 Wakefield employees. Union officilas reported that the action would have devastating impact on retails supplies in the summer peak season, while CCE officilas claim to have "robust contingency plans" in case of industrial action.

To read the press release from the Amicus Section of UNITE click here.

To read an article in ENGLISH on this issue from The Times Online click here.

Wakefield is one of the world's largest bottling and distribution centers, producing 6,000 cans and 1,650 bottles of Coca-Cola brands every minute.

US-UK: Coca-Cola may buy Snapple tea brand from Cadbury Scwheppes

Coca-Cola may be seriously looking into buying Snapple (cold flavored teas) and Mott's (leader in apple and cranberry juices) from Cadbury Schweppes. Coke is interested in expanding its non-carbonated drinks portfolio further after it paid 4,1 bn USD for its largest acquisition ever of Glacéau, market leader of enhanced waters and functional drinks in the US. Cadbury is under strong investors pressure to split its confectionary and drinks business. Coca-Cola competes with a number of private equity groups including a rumoured alliance between Indian Tata Group and private equity Blackstone.

To read an article about this issue in ENGLISH click here.

Pour lire un article sur ce sujet en FRANCAIS cliquez ici.

Coca-Cola king takes UN stage in green drive

E Neville Isdell has come a long way from delivery boy in apartheid South Africa to chief executive of the world's largest drinks group, The Coca-Cola Company , and now, United Nations champion of environmental protection

Isdell, who took the top job at Coke in 2004 and is widely credited with turning it around, took the stage alongside UN Secretary General Ban Ki-moon this week, leading the call for companies to do more to protect the environment.

"I'm an optimist by nature and a realist by experience," Isdell said, rattling the pulpit before government and business leaders who met in Geneva to review progress on the UN's Global Compact on corporate responsibility.

"We need more companies to get involved."

The Global Compact was created in 2000 as a counterweight to anti-globalisation protests, such as those that disrupted the 1999 World Trade Organisation meeting in Seattle.

Isdell as champion of the environment sits well with Coke's optimistic marketing image -- an image largely styled by Isdell in an effort to reverse a malaise that had inflicted the US drinks group before his arrival.

Born in Ireland, Isdell was educated in apartheid-era South Africa and licensed as a social worker before climbing the ladder at Coke.

Isdell, who was an outspoken opponent of apartheid at the time, said he had a lot of explaining to do with his friends, family and several professors after he left social work and chose the corporate path -- and that he assured them he would stick to his ideals.

As such, Isdell has made social engagement a byword of corporate policy, offering, for example, Coke's HIV-positive African employees access to antiretroviral drugs and pledging to uphold workplace quality standards globally.

Isdell has also led Coke's efforts to recycle and reduce packaging, cut energy use and establish closer ties to local communities in emerging markets, and has been an outspoken advocate of the UN's Compact, signed by Coke in 2006.

"In the 21st century, you've going to have to be seen as a steward of the planet," the 40-year Coke veteran told Reuters in an interview alongside the UN meetings.

The 64-year-old family father Isdell, who never studied business and is reputed to drink six to seven cans of Coke Zero per day, wore his ideology on his sleeve in Geneva, railing against his fellow executives to stand up and do more to protect the environment -- particularly drinkable water.

Water zero
Coke as environmental champion may be hard to swallow for anti-globalisation protestors or groups in India who have accused the group of depleting ground water, polluting or selling contaminated soft drinks -- charges contested by Coke.

But civil society critics such as the United Kingdom-based Institute of Social and Ethical AccountAbility say Coke's role in forging ties between business, government and civil society is a positive one.

"The CEO of Coca-Cola sharing the stage with the UN secretary general, Amnesty International and the International Trade Union Confederation? That would not have happened a couple of years ago," said Alex MacGillivray, head of research at AccountAbility.

Isdell says businesses like Coke have a lot to offer non-profit organisations and civil society groups -- mainly lessons in how to get things done efficiently.

Non-governmental organisations and protest groups that once demonised global giants like Coke now sometimes look to businesses as "enablers of change," he said.

But he draws the line at Coke harnessing its legendary distribution network to deliver humanitarian material in Africa -- a suggestion put forward by some aid agencies -- where it is easier to find a can of Coke than, for example, anti-malarial mosquito nets.

"We can't do that," he told Reuters. "At the end of the day we are a commercial enterprise and we can't do what governments do or fail to do." - Reuters

RUSSIA: CCHBC buys Aquavision bottling plant near Moscow

CCHBC continues its strategy of investing and diversifying in Eastern Europe's emerging markets by buying a bottling plant located in proximity of the Russian capital for 191.5 million euros ($260.6 million). The Aquavision facility already counts 4 bottling lines for carbonated drinks, juices, waters and functional drinks along with a warehouse and office space. CCHBC may expand its capacity in the future.

To read a full article in ENGLISH on this topic click here.

SLOVAKIA: CCHBC starts new water line at its Luka unit

CCHBC invested 14.8 mln eur to add new bottling line at its Luka facility for a new water product called Bonaqua, to produce 30,000 bottles an hour.

To read a full article on this topic in ENGLISH click here.

CANADA: CAW Local 973 Ratifies improved collective agreement

Source: CAW

The Canadian Auto Workers Union (CAW) Local 973 members in Brampton, Ontario have ratified a new three-year collective agreement with Coca-Cola, with an approval rate of 100 per cent among skilled trades workers and 76 per cent for the general membership. In this new agreement, the members will have wage parity in every job classification with Coca-Cola workers at the Thorncliffe and Weston, Ontario locations, along with gains in wages, pensions and benefits.

To read the full article in ENGLISH click here.

EUROPE: CCHBC changes its regional structure


CCHBC, the 2nd Coke top-to-top bottler, has announced major changes in the geographic coveragge and management of its regional structure. All three newly defined "regions" now span from the Western Europe to Russia and CIS countries.
To read CCHBC's press release in ENGLISH click here.

BELGIUM: Blue collar unions win 8,3% wage increase in new agreement



After a serie of wild strikes that broke Coca-Cola Enterprises intransigence and brought its management back to the negotiating table (read background here), the Belgian unions secured an 8,3% wage increase (as opposed to management offer of 6.5%) for the period 2007-2008. The rise covers inflation levels for the period and will be paid on 1 January, 2008. The new agreement also includes complementary health benefits for all blue collar workers.

CHILE: largest Embotelladora Andina's union ends 20-day strike


The largest union representing about 25% of a total 886 workforce at Embotelladora Andina's home plant in Santiago de Chile ended a 20-day legal strike over the renewal of collective agreeement. Union members demanded, among others, a 15% raise in basic wage. Embotelladora Andina, one of Coca-Cola's largest bottlers in Latin America with operations in CHile, Brazil and Argentina, recently posted a 30% increase in net income from last year.