Coca-Cola Amatil Searches For ‘Synergies’ In Organisational Shake Up

By Glenn Dyer | More Articles by Glenn Dyer

Coca-Cola Amatil is revamping itself by going to a geographic structure for its various beverage businesses that will see a merging of operations in what looks like another cost-cutting exercise.

The company told the ASX yesterday that in the biggest change, its Australian based alcohol and coffee businesses will be included in the larger Australian beverages segment.

“That, in turn, will see CCA report on the Alcohol & Coffee segment for the 2019 financial year and we expect it to maintain its revenue and growth targets,” CEO Alison Watkins said in a statement yesterday.

Of course in all revamps like this, there are casualties and the most high profile will be Coca-Cola Amatil’s alcohol and coffee managing director Shane Richardson will leave the company following the shuffle.

He had been in his post since 2014 and there obviously wasn’t a spot for in the new structure. The CCA statement also mentioned the word ’synergies’ which is business-speak for cost cuts.

CCA said the revamp is aimed at further simplifying its manufacturing and sales model following June’s sale of food processing business SPC.

Similar changes will occur elsewhere with its New Zealand and Fiji business segment also set to absorb NZ-based coffee and alcohol, Fiji’s Paradise Beverages, and the international alcohol sales team.

The coffee portfolio in Indonesia will now be part of the Indonesian business.

These changes will deliver further synergies between the non-alcohol, alcohol and coffee categories, and build on the existing integration in parts of the business including shared operations and sales teams in Australia and the structure in New Zealand,” Ms Watkins said in yesterday’s statement.

“Our partnerships with Beam Suntory, Molson Coors International, Caffitaly and other brand partners, together with our Amatil owned brands such as Grinders and Feral, put us in a strong position in the alcohol and coffee categories, and we expect that to continue.”

“We’ve also worked closely with The Coca-Cola Company to implement the Australian Accelerated Growth Plan which sees our Australian Beverages business positioned for growth from 2020.

“With the conclusion of our two-year transition phase at the end of 2019, now is the right time to further integrate these businesses and use this new model to drive further growth for Amatil and our brand partners,” Ms. Watkins said.

CCA’s alcohol and coffee businesses were singled out by Ms. Watkins in last months first-half result, with coffee and alcohol revenue and growth targets remaining on track for the full 2019 financial year.

The company’s June 30 first-half profit from continuing operations fell 3.9% to $173.3 million, which the company said it expected, as various container state-based deposit schemes and increased marketing investments hit the Australian beverages business.

The shares rose 1.2% to $11.01.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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