Kendall, just bought KO today. This is the support and now we are going up.
Good news
biz.yahoo.com
All IMHO
TA
-------------------
Friday July 23, 12:27 am Eastern Time
Coke Sees Probe As Routine
By PHIL GALEWITZ
AP Business Writer
NEW YORK (AP) -- Always Coca-Cola may be the beverage king's way of telling consumers that its signature products are the anytime, anywhere refreshments of choice.
But these days -- amid a global economic downturn, a contamination scare in France and Belgium and, now a new European antitrust inquiry-- the slogan might refer to the company always being under the gun.
Coca-Cola's Chairman M. Douglas Ivester insisted Thursday the company's recovery from a European health scare is on track. And he downplayed charges by European regulators that the soft-drink makers tried to bully competitors out of Europe.
At a meeting of securities analysts in New York, Ivester detailed the company's aggressive new European marketing campaign aimed at overcoming the recent blow it took when hundreds of people complained of feeling sick after drinking Coke products produced in Belgium and France.
He described as routine reports or raids over the past two days at Coke offices in Britain, Germany, Austria and Denmark in which European Union antitrust investigators seized documents.
''It's not something I am very exercised about,'' he said.
''Our brand is strong,'' Ivester said. ''Nothing in the past 12 months has altered our long-term view (of profit growth).''
Ivester said the company is cooperating with the probe and noted that the EU has reviewed the antitrust practices of a number of big corporations in recent months.
William Pecoriello, an analyst with Sanford Bernstein, said Coke still faces obstacles.
''This is one more piece of information that investors can worry about,'' he said. ''It's one more uncertainly, but right now we're not overly concerned.''
The EU antitrust investigation is just the latest setback for Coke, which acknowledges the last 12 months have been challenging.
Coke last week reported that second-quarter earnings dropped 21 percent, largely as a result of the contamination scare and the lingering economic downturn across Asia and Latin America. Additionally, regulators have held up Coke's efforts to buy French beverage maker Orangina and most of Cadbury Schweppes' brands overseas. In addition, four current and past black employees have sued the company for racial discrimination.
Coke executives seem most concerned with the economic troubles around the world, which have hurt sales. Executives said Thursday they were confident about a global economic recovery, although they acknowledged it will be gradual.
Ivester accused the news media of overblowing the health risks of the European contamination, saying many of those who reported illnesses hadn't consumed any Coke products.
Nonetheless, Coke has spent millions trying to build back its business in France and Belgium, following the biggest recall of its products in history.
After destroying millions of dollars of Coke, the company is giving away a free Coke to every Belgian.
It is also buying TV and print ads which feature Ivester apologizing.
The company is doing a massive sampling campaign, including 500 hostesses who are giving away beverages in local supermarkets.
So far theefforts appear to be working. Coke officials say they are having trouble keeping up with demand.
European Union Competition Commissioner Karel Van Miert said Thursday that in addition to raids at Coke offices, investigators also seized records from three Coca-Cola bottling partners in Europe.
Investigators were seeking evidence that Coca-Cola exploited its market dominance by offering retailers rebates to shut out competitors.
Coke, and its Sprite and Fanta products account for about half of the soft-drink market in Europe, with PepsiCo a distant second.
''A dominant company on any market cannot indirectly bully competitors by pushing its customers to buy less of the competitors' products,'' Van Miert said.
The chief director of Coca-Cola Nordic beverages, Svend Ivan Petersen, said the company has done nothing wrong.
Van Miert did not say whether the EU had acted on complaints from one of Coke's competitors or from disgruntled retailers
If regulators decide to launch a full-scale investigation, it would likely last at least a year.
Coke's position as the world's biggest soft drink supplier has already brought it into conflict with European regulators. Italy has its own investigation under way into whether Coca-Cola violated its competition laws.
Van Miert, the outgoing EU competition commissioner, has raised the profile of his antitrust regulators in a series of cases in recent years, including the imposition of conditions on Boeing's $15 billion takeover of McDonnell Douglas in 1997, and the handing down a record $106 million fine against Volkswagen last year for restrictive sales practices. Last week, the commission fined British Airways PLC $7 million for rebates to travel agents who increased the airline's ticket sales at the expense of competitors.
|
