Coca-Cola Amatil Ltd (CCA) is aiming to maintain profitability for itself and wholesale customers, rather than engaging in a discount war with rivals who have eroded its market share.
"No-one likes to lose share but if competitors are prepared to sell at a loss, or heavy discount, well I'm not so sure that we're going to follow suit," CCA CEO Terry Davis told Sky News.
"Our job is to make sure that the profitability of the category
is strong.
"We focus very heavily on value share, and our major customers
focus on value share, because if they continue to sell products at
discounted prices, they make less money."
Losing market share has certainly not hurt CCA's performance. CCA, which is 30% owned by US-based The Coca-Cola Co, said this week it expected "high single digit" percentage growth in net profit for the six months to June 2009, compared to the prior corresponding period.
The company posted net profit of $AU172 million in the first half of calendar 2008, and a five per cent increase from that level would equate to an over $AU180 million profit.
Davis said he was focused on internal growth rather than any takeovers and refuted recent speculation that Sydney-based CCA was in discussions with Australia's biggest brewer Foster's Group Ltd.
"We're very comfortable with our organic growth strategy," he said.
"We're not in any discussions with Foster's."
Davis also said that if Lion Nathan Ltd had been prepared to pay the premium Kirin Holdings Co had paid for Lion, then he might have considered the offer.
CCA recently rejected a $AU7.6 billion takeover proposal from Australia's second biggest brewer Lion Nathan, which itself now is being acquired by its largest shareholder, Japan's biggest drinks maker, Kirin Holdings Co.
"If the same multiple had been offered for CCA, then it would have accounted for another $2 billion in value for our share holders," he said.
"Really what we were saying there was that the bid for CCA was grossly undervalued.
"The price Kirin was prepared to pay for Lion was evidence of that."
