Coca-Cola Consolidated agrees to expand US bottling territory

Coca-Cola Bottling Co Consolidated has agreed to take on more distribution territory in Ohio.

The bottler has signed a non-binding letter of intent with The Coca-Cola Company for exclusive distribution rights in some northern parts of the state, currently by another Coca-Cola bottler. The acquisition of the territory will be facilitated by Coca-Cola Refreshments USA, a wholly owned subsidiary of Coca-Cola, and will allow Coca-Cola Consolidated to further grow its coverage.

Since May 2014, the bottler has expanded its distribution territory in 11 eleven states, and purchased manufacturing facilities in Maryland, Ohio and Virginia.

Coca-Cola Consolidated has also stepped back from plans to expand its distribution territory in West Virginia, with the territory now set to be transferred to another Coca-Cola bottler instead. But the company will continue to work towards fulfilling the terms of a previous letter of intent, signed in February 2016, including the purchase of a manufacturing facility in Twinsburg, Ohio.

And it still expects to exchange distribution territory in Alabama, Georgia and Mississippi – as well as a manufacturing facility in Mobile, Alabama – for distribution territory in parts of Arkansas, Tennessee and Mississippi. That deal will involve relinquishing a a manufacturing facility in Mobile, Alabama and inheriting two other plants in Tennessee and Arkansas.

The transaction proposed as part of today’s letter of intent is expected to close by the end of the year.

It forms part of Coca-Cola’s commitment to accelerate efforts to refranchise all of the North American bottling territories under its ownership by the end of 2017 – three years earlier than initially planned.

The proposals included the sale of 39 cold-fill production facilities, which produce sparkling beverage brands such as Coca-Cola and Sprite, as well as still ranges like Dasani.

Since announcing the move in February 2016, Coca-Cola has refranchised six production facilities in the Midwest, as well as additional bottling territory in the Pacific Northwest and North Carolina.

It also reached an agreement with its bottlers in China to refranchise all existing company-owned bottling territory in the country in November last year.