Insufficient sales of carbonated soft drinks equipment manufacturers affected

The sluggish sales of carbonated drinks are affecting more companies. According to information released on June 15 by the Beijing Property Exchange, as one of the bottled partners of the Coca-Cola Company, the Swire Pacific Beverage Company is under the sale of shares of China CITIC Limited, an important shareholder, with a total listing price of 1.24 billion yuan. Swire had cooperated with CITIC China for many years and now it has to end its cooperation by selling equity. Industry sources pointed out that the slowdown in the growth rate of carbonated beverages, and the slowdown in the growth of Coca-Cola's performance have been transmitted to the Swire Pacific beverages business segment, and the exit of China CITIC may lead to further deterioration in performance.

Three company shares sold

Coca-Cola's bottled partners, the three companies in the Swire Group’s beverage business, are facing shareholder equity sales. According to the Beijing Equity Exchange listing information, the three companies are Taikoo Zhongcui Development Co., Ltd., Hefei Taikoo Coca-Cola Beverage Co., Ltd. and Zhengzhou Taikoo Coca-Cola Beverage Co., Ltd., and the three companies have a single shareholder CITIC CITIC. The shares they sell are 15% respectively. , 20% and 12.86%, listing prices were 7.3498 billion yuan, 235.7 million yuan and 279 million yuan.

The information indicates that from the time of Taikoo, the two local production and sales companies, China CITIC is fully withdrawing from the relevant investment in Swire beverages.

Dragged down by carbonated drinks

Why does China CITIC have to withdraw from the relevant business segments of Coca-Cola production and sales? Industry sources reminded that the reasons for the withdrawal of China CITIC could be initially determined from the general environment of the slowdown in the growth of carbonated soft drinks. Swire Pacific’s 2014 financial report shows that last year Swire Beverage recorded a profit attributable to HK$850 million, an increase of 6% over the previous year, and profit attributable to Mainland China was HK$395 million, a decrease of 5% from the previous year. Looking back at Swire's 2013 financial report, its profit for the beverage segment for the year was HK$802 million, an increase of 44% year-on-year, and profit attributable to operations in Mainland China was RMB 410 million, an increase of up to 101%. In addition, Swire Pacific also pointed out in its financial report that the overall sales of soft drinks in 2013 increased by 8% to 1% by 2014 when referring to the overall development of the domestic beverage industry.

“The Coca-Cola Company was also affected by various reasons such as the decline in the growth rate of carbonated beverages, and its net profit declined year-on-year. It can be seen from the earnings report of Swire Pacific that while the company’s beverage segment is still maintaining positive growth, its growth rate A significant decline has occurred with the influence of Coca-Cola, an important partner. This may be one of the reasons for the early withdrawal of China CITIC,” said one industry analyst who did not wish to be named.