Coca-Cola shakes up European operation

Coca-Cola said yesterday the head of its European business would retire after 37 years with the fizzy drinks giant as it struggles to regain its place as the world's favourite thirst-quencher.

Coca-Cola said yesterday the head of its European business would retire after 37 years with the fizzy drinks giant as it struggles to regain its place as the world's favourite thirst-quencher.

Sandy Allan, 60, the company's president of Europe, Eurasia and the Middle East since July 2001, will leave the company in May. Meanwhile, Coke is creating a unit to concentrate on marketing and innovation, which will be run from 1 May by Mary Minnick, who has been the president of Coke's business in Asia for four years.

The moves represent the first major changes implemented by Neville Isdell, Coke's Irish chairman and chief executive, who was promoted to the top job last May to reinvigorate the Atlanta-based beverage company.

In January, Javier Benito, the chief marketing officer for the North American unit, resigned after 10 years with the company as part of the wider restructuring of marketing and advertising.

Mr Isdell said last month he was "not satisfied" with Coke's performance in 2004, when the company was beset with slow sales in parts of Europe, especially Germany, and its key North American market. He set 2006 as the time when Coke would turn around its fortunes and regain ground on competitors such as Pepsi.

Mr Isdell said yesterday: "We must ensure execution with excellence, inspire and motivate, promote entrepreneurship and accountability, and support the efforts of our bottling partners."

A new division including all of Coke's operations in European Union countries will be established. It will be led by Dominique Reiniche, who previously held the post of president of Coca-Cola Enterprises Europe.

Coke has developed several products to combat sluggish sales. It will introduce Coca-Cola Zero in the US in June, which it says will have the same taste as the traditional Coke, but without the calories. It is also phasing in a version of Diet Coke sweetened with Splenda, an artificial sweetener. Shares in Britain's Tate & Lyle have benefited from the news as it manufactures sucralose, a key ingredient in Splenda.

Mr Isdell has made marketing the centrepiece of his turnaround plan, and has increased spending on advertising by $400m (£214m) this year on new products, including its Coca-Cola with Lime.

Wall Street had accused the company of losing its direction in recent years. As a consequence, Pepsi and other entrants to the fiercely competitive soft drinks market had eaten into its market share.

Coca-Cola's average sales gains, of 2.3 per cent within the past five years, compares with 7.5 per cent for Pepsi, which leads in the faster-growing market for non-carbonated drinks.