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Coca-Cola earns $290 mn from India by divesting its bottling operations in Jan-Mar

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In the first quarter of 2024, the Coca-Cola company witnessed “growth” in Unit case volume in the India market

New Delhi: Global soft drinks major the Coca-Cola Company has earned $290 million (around Rs 2,420 crore) from India in the March quarter by refranchising its bottling operations to its existing bottlers in three key markets here.

HCCB, Coca-Cola’s bottling arm in India, had in January this year announced to divest company-owned bottling operations in Rajasthan, Bihar, Northeast, and parts of West Bengal to its existing bottlers.

“During the three months ended March 29, 2024, the company recorded net gains of $599 million and $293 million related to the refranchising of our bottling operations in the Philippines and in certain territories in India, respectively,” said Coca-Cola in its earning statement on Tuesday.

India is the fifth largest market of the Atlanta-based company, which operates here with brands as Coca-Cola, Coke, Thums UP, Maaza, Sprite, Fanta, Minute Maid, etc.

Hindustan Coca-Cola Beverages (HCCB) had transferred bottling operations to its existing partners in these three regions — Kandhari Global Beverages, SLMG Beverages and Moon Beverages — respectively.

This was part of Coca-Cola’s plans to divest assets globally by franchising regional operations to local partners.

In the first quarter of 2024, the Coca-Cola company witnessed “growth” in Unit case volume in the India market, it said.

However, in the Asia Pacific market zone, under which India falls, unit case volume has declined 2%  in the first quarter on account of decline in water, sports, coffee, and tea.

“Growth in the Philippines, India, Vietnam, and Indonesia was more than offset by a decline in China,” said the statement.

Globally, the Coca-Cola company’s unit case volume grew 1% in 2024.

Unit case volume means the number of unit cases of company beverages directly or indirectly sold by the company and its bottling partners to customers.

The Coca-Cola Company’s net revenue for the March quarter grew 2.9% to $11.3 billion, and organic revenues (non-GAAP) grew 11%.

Coca-Cola Company Chairman and CEO James Quincey said, “We are encouraged by our start to 2024, delivering another quarter of volume, topline and earnings growth amidst a dynamic backdrop.”

On the outlook, the company said it “expects to deliver organic revenue (non-GAAP) growth of 8-9% , which consists of operating performance at the high end of the company’s long-term growth model and the anticipated pricing impact of a number of markets experiencing intense inflation”.

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