Foster's soft drinks headed to Coca-Cola
Coca-Cola Amatil is set to buy out Foster's non-alcoholic beverage division, including the Cascade soft drink brand, the final asset swap resulting from the brewer's $12.9 billion merger with SABMiller last year.
Under the terms of a deal negotiated prior to the Foster's acquisition, SAB agreed to sell CCA the rights to buy Foster's spirits, pre-mixed drinks, Fijian and soft drink divisions once the takeover was complete.
In return, SABMiller was allowed to buy CCA out of the Pacific Beverage joint venture liquor business they had run together since 2006, while CCA agreed to stay out of the Australian beer market until 2014.
CCA took up the option to buy Foster's Fijian brewing and distilling business in March but passed on the spirits business, which includes The Black Douglas scotch whisky, Kirov vodka and Cougar bourbon, preferring instead to ramp up its distribution of spirits from US drinks major Beam.
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Yesterday, two weeks short of the 12-month anniversary of the Pacific Beverages sale agreement, staff at Foster's Cascade soft drink plant in Tasmania were told that the business had been sold.
"It is our intention to purchase the brand, and we are still going through the required processes for that to happen," a company spokeswoman said last night.
CCA, led by managing director Terry Davis, will take over the brands, including Cascade's soft drink and fruit juice brands and Torquay water, but will not buy the associated assets. However, the sale is not expected to result in significant job losses at Foster's as most staff involved in soft drink production also worked at the Cascade brewery, which is being kept.
SABMiller is yet to decide on the fate of the Cascade soft drink plant, which could be used for contract production.
The transaction will leave one less point of competition between the former joint-venture partners, set to enter a pitched battle in just over 18 months when Foster's re-enters the Australian beer sector.
CCA alcohol division boss John Murphy -- a former managing director of Foster's Australian brewing business CUB -- told analysts this week that CCA would have beer ready to launch once the non-compete deal with SABMiller expired in January 2014.
CCA has formed partnerships with global brewers including Corona parent Modelo and US brewer Molson Coors to distribute their brands in Fiji and New Zealand, and hopes to extend these arrangements to Australia in 2014.
Mr Murphy said CCA generating $600m in annual revenue from more than 15,000 alcohol customers in Australia, and controlled distribution of the best-selling spirit brand, Jim Beam.
Source: The Australian, 7 June 2012
Update
Global soft drink giant wants Cascade
The multi-national soft drink company Coca Cola Amatil has confirmed it is intending to buy the Cascade brands, raising concerns about potential job losses in Hobart.
Carlton United Breweries says the acquisition will have no impact on beer and cider production at its South Hobart brewery.
Helen Gibbons of the union representing Cascade workers, United Voice, has told ABC Radio's Country Hour program Coca Cola Amatil is buying the brands only, not the soft drink plant.
"They intend to make these drinks somewhere else we're not as clear about what they're going to do with the cider," she said.
"We think the cider might continue to be made in Tasmania but my understanding is that the cordials, or the non-alcoholic drinks are going to be made elsewhere."
Dick Warner from the Australian Blackcurrant Association says local growers hope they will continue to supply the new owners.
"We would see only very positive benefits coming for our group for growers here and those two labels being supported and marketed by Coke," he said.
Coca Cola Amatil says it intends to continue sourcing produce from Tasmanian growers.
It says the transfer is expected to be completed over the next two months.
Source: ABC News, 8 June 2012
