Coca-Cola begins sell-off of bottling operations

NEW DELHI: Beverages maker Coca-Cola on Wednesday announced the partial divestment of its bottling operations, beginning with the North.
Two officials directly aware of the developments said to begin with, Coca-Cola has sold off 10% of its company-owned bottling operations in four markets in North India.

ET had broken the story in its October 30 edition.

The maker of Coke and Sprite soft drinks and Minute Maid juices said in a statement that in an internal realignment of its bottling operations in North India, Hindustan Coca-Cola Beverages Pvt. Ltd (HCCB), its own bottler for the majority of India, will transfer its business operations in four territories in North India to existing bottlers.

“The change involves four non-contiguous territories in which HCCB currently operates and is designed to build regional scale, stimulate investments and growth in the northern part of the country. HCCB will continue to operate in East, West and South of India,” the company said in the statement.

According to the officials mentioned above, the majority bottling operations have been brought by diversified entrepreneur Sanjeev Agrawal-promoted MMG Group, which owns Moon Beverages. Also Coca-Cola’s largest existing independent franchise bottler, Moon Beverages has acquired HCCB’s bottling territories in Delhi-NCR and Western UP. The Ladhani brothers have jointly acquired HCCB’s bottling territories operations in eastern UP, while a smaller territory has been acquired by the Kandhari Group.

Coca-Cola did not comment on specifics of the deal.

The move to refranchise bottling operations is in line with Coca-Cola’s global strategy to divest asset-heavy operations, and reduce fixed costs, leading to higher profitability.