Posted on 06/08/2006 12:27:13 PM PDT by RWR8189
NEW YORK (CNNMoney.com) - Coca-Cola, fearing Wal-Mart would launch its own sports drink to rival the beverage giant's Powerade if it didn't agree to the retailer's new distribution terms, caved under the pressure and altered its own century-old supply system, a published report said Thursday.
Wal-Mart, the world's largest retailer, asked Coke last year to switch to the straight-to-warehouse delivery method, and Coke's largest bottler, Coca-Cola Enterprises (Research) (CCE), began doing so across much of the U.S. in April, the Wall Street Journal said.
But according to June 1 court filing by Coke, the company stated that it faced a "serious risk" of a Wal-Mart-branded rival to Powerade unless it abided by Wal-Mart's demands of direct distribution instead of having Coke (Research) bottlers deliver drinks to individual stores within their exclusive territories and stack those drinks on store shelves.
The disclosure was made in a lawsuit filed in U.S. District Court in Atlanta against Coke and its largest bottler by 55 smaller bottlers, the paper said.
The smaller bottlers who brought the suit claim the distribution change violates their distribution contracts with Coke, but the beverage giant and CCE have argued that the plaintiffs aren't entitled to "claim nationwide veto rights" over how another bottler serves its territories, the paper said.
Internal CCE documents filed as part of the suit show that Wal-Mart officials criticized the traditional Coke distribution system for failing to keep Powerade in stock on store shelves and for taking too long to introduce products throughout the Wal-Mart chain, the paper said.
(Excerpt) Read more at money.cnn.com ...
And Wal-Mart has been a great neighbor to us in our town. Always providing for any need that comes up. Parades, Forth of July. Wal-Mart is always part of our community!
Personally, I will sacrifice price for someone who can tell me what isle the hardware is on.
And will willingly pay a few cents extra for 3 extra cash registers being opened to reduce lines with 10 people in them.
Wal-Mart changed after Sam Walton died. Now, the customer isn't first, the bottom line is first at the expense of servicing the customer.
Check the date on your link, the story is over 2 years old.
Posted 3/17/2004 11:08 PM Updated 3/18/2004 7:09 AM
Just get there at 6:00am and you will have all the help you need and no lines at the register.
Beep-beep.
Ha. I had to run by a Wal-mart Supercenter this week at 11:00 on a Monday night.
When I got to the registers, there was 1 register open with 6 people in line. All of the self-serve registers were off-line because they had no one up front to moniter them.
18 minutes to get checked out at 11:00 p.m.
It's laughable to accuse Walmart of strong-arming Coke because Coke's being doing this kind-of-stuff for the last 100 years.
Can you buy a Coke and a Pepsi at any resturant in America? No you can't, it's one or the other, thank Coke for that.
What's really happening here is this. Walmart makes the same types of deals with all their suppliers. On-time delivery is everything to them. They are also 100% kanban type business and demand this from their suppliers. But the typical killer in their deals is this, Walmart reserves the right demand an increase in quantity of product from all of their suppliers at any-time. Problem is that many suppliers have a very difficult time meeting this requirement, especially when Walmarts period demand increases 2 to 10 fold over the initial sales estimates.
This happens to a lot of smaller suppliers, as Walmart is so huge, that if their product is a hot seller, Walmart keeps increasing the amount that the supplier must deliver so that Walmart can keep turning the product. Small suppliers end up expanding rapidly, often to rapidly when the supply demand from Wlamart decreases.
It's odd that the Powerade product is where this is occurring, as I've tasted it once and it's not drinkable. There is no comparison with Gatorade. Both sports drinks are carried by Walmart and I think they also have a 3rd on the shelves.
The issue with Coke is it's inability to keep Walmart supplied with the volume of Powerade that Walmart is now demanding. Walmart retains the right to dictate quantity of product that must be supplied to them and if Coke cannot meet this level of demand, they are in default of the contract, not Walmart.
Hence, Coke has an inefficient supply chain when compared to other Walmart suppliers (or those willing to be suppliers) and they haven't changed it to accomidate the ever increasing demand for Powerade. Which again I cannot understand, because it's just terrible. And I'm a Coke, not Pepsi person.
Please.
Wal mart used awful underhanded tactics to undermine and bankrupt the Bradlees discount chain in my area. True that company was run ineptly, but they still were helped by Wal Mart to accelerate their demise.
Obviously, I cannot prove it, and frankly, I do not care. Bradlees was a weak merchandiser who would not stand up to the unions. A few execs won golden parachutes, and hundreds of workers and families paid the price. I am not exactly sympathetic to their plight, but it did happen.
The notion that Wal Mart is not a malicious predator is simply naive. In the end, the consumer will pay dearly.
According to the article, they would only put out a store brand, not yank the Coke product.
Dr. Pepper is one of Coca Cola's brands.
If you have no evidence then why in the world would you make a claim such as this? Besides that if what you call "underhanded tactics" were used, were they illegal? Here's a heads up for you. No business ever became successful by being the nice guy when it came to the competition. Running a successful business is a fight to the death on a daily basis.
Not really. Sports drinks are pretty much like any other. What matters is advertising and distribution. Wal-Mart could easily produce its own drink and stock and advertise it instead of Powerade. It would sell millions, and Coke would lose a significant percentage of Powerade sales.
The only question is whether both are braced for an all-out war, where Wal-Mart makes its own drink and Coke pulls out completely, all of its products. It would cost both of them millions.
I think that was Toro.
In SoCal, soft drink prices are much higher than the local stores....because the union stores use them as loss leaders.......buy 4 12-packs for $10 etc.
11PM ain't 6AM.
Sorry, in my interest in proving a stupid point I stumbled upon a site which I did not properly review before linking.
Wal Mart is interested in union busting, and that is perfectly fine with me.
I have seen what unions can do to companies, and it is shameful in many cases.
It ain't as if we are living under George Pullman types any longer. Nowadays it is the Democrat party that contains the true scions of those dead parasites in our society. Were the robber barons bad for us? There is a case to be made.
Democrats love to suck up to those vultures in the union leadership positions. Talk about religion.
Of course I digress but I do see it all connected.
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