Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Coke caves under Wal-Mart pressure
CNN/Money ^ | June 8, 2006

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 ...


TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: cce; cocacola; coke; powerade; sportsdrinks; walmart
Navigation: use the links below to view more comments.
first previous 1-20 ... 41-6061-8081-100101-115 next last
To: Hendrix

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!


61 posted on 06/08/2006 1:25:18 PM PDT by BellStar (God makes a promise, faith believes it, hope anticipates it, patience quietly awaits it.)
[ Post Reply | Private Reply | To 58 | View Replies]

To: Hendrix

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.


62 posted on 06/08/2006 1:25:23 PM PDT by Bryan24 (When in doubt, move to the right....)
[ Post Reply | Private Reply | To 58 | View Replies]

To: jwh_Denver

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


63 posted on 06/08/2006 1:25:25 PM PDT by Eagles Talon IV
[ Post Reply | Private Reply | To 38 | View Replies]

To: Bryan24

Just get there at 6:00am and you will have all the help you need and no lines at the register.


64 posted on 06/08/2006 1:26:40 PM PDT by Eagles Talon IV
[ Post Reply | Private Reply | To 62 | View Replies]

To: Gabz

Beep-beep.


65 posted on 06/08/2006 1:26:54 PM PDT by azhenfud (He who always is looking up seldom finds others' lost change.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Bryan24
"Personally, I will sacrifice price for someone who can tell me what isle the hardware is on."

Fair enough. If you want to pay for that service, some store should offer it (if there is enough demand) and you can shop there. For others, they just want the low cost without the extra service, and Walmart offers that. I guess you still like to go to full service gas stations as well while the most people prefer self-service for the lower costs. To each his own, but don't use illogical arguments to bash Walmart.
66 posted on 06/08/2006 1:28:29 PM PDT by Hendrix
[ Post Reply | Private Reply | To 62 | View Replies]

To: Eagles Talon IV

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.


67 posted on 06/08/2006 1:29:29 PM PDT by Bryan24 (When in doubt, move to the right....)
[ Post Reply | Private Reply | To 64 | View Replies]

To: Extremely Extreme Extremist
I was replying to a the statement that Walmarts threat to produce a sports drink was a bluff.

Do you believe it was a bluff?
68 posted on 06/08/2006 1:30:17 PM PDT by Eagles Talon IV
[ Post Reply | Private Reply | To 50 | View Replies]

To: Extremely Extreme Extremist
"Most of the drivers for bottlers are just kids in college barely making $12.00 an hour."

 
I did one click on a Google search.
 
 Are Teamsters in Mo. working for only 12 Bucks an hour?
 
http://www.teamster.org/06news/hn_060601_4.asp
 
How about this one?
 
Teamsters drivers and warehouse workers now earn an average of $18.37 to $19.17 an hour, a Teamster spokesperson said.
 
http://www.killercoke.org/lat0607.htm

69 posted on 06/08/2006 1:30:36 PM PDT by Radix (Stop domestic violence. Beat abroad.)
[ Post Reply | Private Reply | To 43 | View Replies]

To: Bryan24

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.


70 posted on 06/08/2006 1:36:30 PM PDT by Diplomat
[ Post Reply | Private Reply | To 33 | View Replies]

To: Hendrix
"To each his own, but don't use illogical arguments to bash Walmart."

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.

71 posted on 06/08/2006 1:37:46 PM PDT by Radix (Stop domestic violence. Beat abroad.)
[ Post Reply | Private Reply | To 66 | View Replies]

To: Bryan24
Since I am an early riser and have been for many years I find it no problem to get to a store such as WM, Lowes, Home Depot, etc when it opens. I always find employees standing around because there are few if any customers and never is there a line at the register. If more then 2 people are lined up I simply use the self check lane and I'm on my way in no time.
72 posted on 06/08/2006 1:38:48 PM PDT by Eagles Talon IV
[ Post Reply | Private Reply | To 67 | View Replies]

To: Bryan24
<If Coke tries to buck Wal-Mart, they yank their product off their shelves.

According to the article, they would only put out a store brand, not yank the Coke product.

73 posted on 06/08/2006 1:41:52 PM PDT by stands2reason (You cannot bully or insult conservatives into supporting your guy.)
[ Post Reply | Private Reply | To 49 | View Replies]

To: nhoward14

Dr. Pepper is one of Coca Cola's brands.


74 posted on 06/08/2006 1:44:15 PM PDT by ol' hoghead (The final calculation must be a bit different since it doesn't take the rolling resistance of the ve)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Radix
"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."

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.

75 posted on 06/08/2006 1:45:10 PM PDT by Eagles Talon IV
[ Post Reply | Private Reply | To 71 | View Replies]

To: Extremely Extreme Extremist
Wal-Mart's creation of a new sportsdrink is a laughable bluff.

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.

76 posted on 06/08/2006 1:47:55 PM PDT by antiRepublicrat
[ Post Reply | Private Reply | To 13 | View Replies]

To: NCLaw441

I think that was Toro.


77 posted on 06/08/2006 1:48:12 PM PDT by ol' hoghead (The final calculation must be a bit different since it doesn't take the rolling resistance of the ve)
[ Post Reply | Private Reply | To 28 | View Replies]

To: Extremely Extreme Extremist

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.


78 posted on 06/08/2006 1:48:16 PM PDT by BurbankKarl
[ Post Reply | Private Reply | To 47 | View Replies]

To: Bryan24

11PM ain't 6AM.


79 posted on 06/08/2006 1:52:08 PM PDT by stands2reason (You cannot bully or insult conservatives into supporting your guy.)
[ Post Reply | Private Reply | To 67 | View Replies]

To: Radix; Extremely Extreme Extremist; All

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.


80 posted on 06/08/2006 1:53:11 PM PDT by Radix (Stop domestic violence. Beat abroad.)
[ Post Reply | Private Reply | To 69 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-20 ... 41-6061-8081-100101-115 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson