Financial Daily from THE HINDU group of publications
Friday, Oct 17, 2003
Financial Daily from THE HINDU group of publications Friday, Oct 17, 2003 |
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Corporate
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Announcements Coke admits pesticide drag on India Q3 performance P.T. Jyothi Datta
New Delhi , Oct. 16 THE shadow of the pesticide controversy in India seems to follow close on the heels of global soft drink major Coca Cola, with the company admitting today that the controversy has in fact been a drag on its financial performance in India for the third quarter (Q3). "In India, the beverage industry was impacted by false accusations that soft drinks contained high levels of pesticides. As a result, the company's unit case volume declined during the quarter, following several consecutive quarters of strong double digit-growth," the parent company said, announcing its Q3 results from Atlanta. This, even as the company's global revenues register a 21 per cent increase, clocking $4.1 billion, in its first nine months. Coca Cola's results during Q3 benefited from 5 per cent unit case growth in international operations led by strong performance throughout Europe, Mexico, China, Argentina and Thailand. "This strong performance was partially offset by weak beverage industry trends in both Japan and India," the parent said. This is in stark contrast to the parent's observations on its India operations last year, where it expected strong performance from India, besides China and the Philippines. This time around, India came in for more mention, with reference made to the pesticide controversy affecting the soft drink segment. Admitting that the company's unit case volume declined during the quarter, following several consecutive quarters of strong double-digit growth, the note added that the situation in India would continue to be monitored, even though unit case volume trends have stabilised over the past few weeks. No details on the Indian performance were available, as the company does not provide market specific break-ups, company officials told Business Line. Meanwhile, worldwide unit case volume grew by 4 per cent in the third quarter and 4 per cent on a year-to-date basis, the company said. This was led by 5 per cent growth in international operations and 2 per cent growth in North America. In the Europe, Eurasia and West Asia market - unit case volume increased 9 per cent in the Q3 and increased 6 per cent for the first nine months. And in Asia, unit case volume increased 1 per cent for the quarter, cycling 9 per cent growth in the prior year third quarter. Though unit case volume trends in Q3 were affected by weaker industry trends in Japan and India, the company said that Asia's performance during the first nine months was led by growth in China, Australia, Thailand and India. "In China, unit case volume increased 24 per cent during Q3, cycling 13 per cent growth from the prior year," the company said, with the carbonated soft drinks segment recovering from the SARS-impact, thanks to marketing initiatives.
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