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 ...
You are right in your post with the other things you said as well.
Still, I know because I worked for a company affiliated with that company. Distribution stuff. That particular company was wrecked from the inside, and I know a lot of people who saw it first hand.
It was outrageous.
I happen to know a lot of things that I cannot prove. But we are simply chatting here after all.
Well, hell, let's hear what you yourself heard about this underhandedness. I love it when big business fights it out among themselves. Sort of like watching Lions fight for their territory. I'm just curious as to what is considered to be underhanded by you.
No, it is not. Coca-Cola licenses Dr. Pepper for distribution outside Australia, Europe, and North America, but the brand is owned by Cadbury Schweppes.
I stand corrected. Thank you.
We did a thing on Japan in a college business class. The thing I remember most is that Japan didn't have much of a direct welfare system. Instead, they made the consumer supply chain so deep and redundant that there were plenty of jobs available. Welfare by any other name...
I talked to a distribution manager at Hallmark Cards once.
Wal Mart summoned him and a bunch of other vendors to their headquarters.
They were all placed in a room around a table. A man walks in and says, "We're picking one vendor. One that writes the biggest check wins. I'll be back in an hour."
Thanks for the correction. My point is that consumer debt is not shrinking but still growing. I have seen no source that says consumer debt is shrinking.
Once again WMT hurts the small business owner. Most delievery guys these days are independent contractors. This type of action by WMT hurts those people. They are mandating the same action from bread companies. I have a family member who stands to loose a big part of his route by these changes.
Once again WMT hurts the small business owner. Most delievery guys these days are independent contractors. This type of action by WMT hurts those people. They are mandating the same action from bread companies. I have a family member who stands to loose a big part of his route by these changes.
The majority of Coke products are bottled by Coca-Cola Enterprises, which is a separate bottling operation that is majority owned by Coke (Pepsi has a similar operation)
Coke becomes hard to find? Nah...Coke is...what's the word I'm seeking??...Oh, yeah...ubiquitous! Always has been, always will be.
Not in Michigan. Not in Indiana. Not in Illinois.
How about establishing a mole into one of the highest executive positions in a company, and obtaining an iron clad contract with a guaranteed golden parachute for the mole?
You know the type that gets the shortimer chief exec paid millions of dollars first and before any other debt including that owed to stockholders.
How about if that particular executive mandates a transportation system which requires that the Wal Mart example be followed as closely as possible, despite the fact that the "competition" is not restricted by union contracts or other ridiculously simple regs?
How about invoking a drop & pick trailer program for a company which simply does not have the equipment to support such a program?
"How come we are always out of trailers?"
Gee, the fact that you have half of them sitting at stores empty while the warehouse has no way to load them because they are not "on hand?"
I happen to know a lot about the circumstances that drove that 1 particular merchandiser out of business.
There is an old saying..."If you own it, a truck brought it."
Physical Distribution is the key to any successful product or business.
I know way more than I'll ever tell on any web site about this stuff.
Wal Mart also knocked out the Caldor and Ames chains around here. I have Little doubt that they used whatever tactics that they felt were neccesary. I'd consider them to be more than a bit underhanded.
Good for them. I shop there sometimes. They are managed by skunks, but at least they are good at what they do.
Things will change I am certain. There will always be somebody more ruthless.
I work for Pepsico. I really like your way of thinking. Why don't you apply for a job a Coke. It would make my day seeing you on their board of directors.
And Coke may have/ probably has a contract for x amount of shelf space in Wal-Mart....empty shelves are a hideous waste of retail space and, to take it a step beyond, if a Wal-Mart customer has 'Power Ade' on their shopping list and the shelf is empty, the customer is pissed off at Wal-mart and not Coca-Cola. OR the customer says, 'What the Hell, the kids can drink GatorAid.'
Cott makes Sam's Choice for WMT as well as making a lot of other private label brands.
http://www.cott.com/
Old Roy is the best selling dog food brand in America. I have two dogs and two teenagers. This household spends more money annually on sports drinks (mainly PowerAde) than we do on dog food.
Dr. Pepper is part of the RC/7 UP conglomerate.
WALMART ping...............(let me know if you want on or off this list that is to counteract the WM bashers........
Let me see if I've got this straight........Coke is being sued and is using possible competition from a WalMart in-house brand for changing it's procedures as a defense for what brought about the suit to begin with????????
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