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We don't want the real thing: Coke sales dive

Abigail Townsend
Sunday 27 March 2005 02:00 BST
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Coca-Cola's UK sales plunged by more than £100m last year as consumer demand for healthier options hit home.

According to a review of the soft drinks sector by rival Britvic, the UK subsidiary of the US giant, Coca-Cola Enterprises (CCE), saw sales slide 7 per cent last year to £1.46bn. The withdrawal of Dasani, the bottled water that turned out to be glorified tap water with added cancer-causing chemicals, and a wet summer would have played a part in the decline.

However, a spokesman for Britvic added: "Consumers are now calling for 'better for you' options. The White Paper [on health] last year has probably played an awful lot on people's minds. We all need to take a greater interest in what we eat and drink."

The news comes at a tough time for Coke. Stung by sluggish sales and fierce competition, it announced a shake-up of its management team last week and the creation of an emerging-markets group in a bid to regain the initiative. It appointed a new head of global marketing and said its European chief, Sandy Allan, would retire in May to be replaced by the president of CCE, Dominique Reiniche.

It is not the only group to suffer from changing tastes. The survey also found that sales at Britvic, which is hoping to float on the London Stock Exchange, had dipped - by 3 per cent to £615m. Sales of its Tango brand, a rival to Coke's Fanta, were down 19 per cent.

GlaxoSmithKline, which owns the Hydro Active brand, and Danone, the French business behind Actimel and Evian, saw sales improve by 1 per cent and 20 per cent respectively.

Overall, the soft drinks market remains highly profitable. Paul Moody, the managing director of Britvic, noted in the report that "2004 was another strong year" with total sales topping £7bn, a 2 per cent rise.

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