Apr 22, 2020
Coca Cola, a soft-drink makers are confronting their toughest quarter ever, which industry officials said was worse than the pesticide controversy in 2003. Due to pandemic, sales of the company has given poorest performance ever in history.
Coca-Cola India, decided to write off the value of surplus inventory of its bottling partners, with large stock of soft drinks and juices left unsold during the lockdown as the company braces for its worst sales ever.
According to the bottling partners, the move will affect Coca-Cola’s products such as Coke and Thums Up colas, Sprite lime drink, Minute Maid juice and others low-sugar colas, having shelf life of three months on an average.
“All bottlers have excess stock of finished products and even concentrate that they had manufactured and bought for the peak April-June quarter, which contributes over 50% of annual soft-drink sales. Coca-Cola said it will write off the value of unsold stocks,” said two officials with direct knowledge of the development.
The most affected inventory will be that of larger, out-of-home consumption glass and PET bottles and cans, even though bigger 1.5 and 2 litre packs have been selling at general and modern trade outlets.
The timing of lockdown has coincided with the peak summer season and major sales have been hit across hotels, restaurants, bars, theatres, travel and various events. The April-June quarter contributes more than half of the soft-drink industry’s annual sales of over ₹20,000 crore, of which out-of-home consumption accounts for 80% of sales.