Following up the UK Coca-Cola parallel import story, and following great research by Colin, Heiko sends on an email he got from a friend with some inside information from another beverage company [names & countries withheld for obvious reasons, but it's not Coca-Cola and it's not UK]:
It's one of the problems that we encounter as well, the so called parallel imports and cross border. We can't do much about cross border because that is trade within the EU. Parallel imports however are coming from outside the EU. These bottles are produced at the [Company XXX] plants in other countries but sold at a lower price in [Country YY]. You would think this would not be a problem since it is still XXX owned. The problem lies in the fact that A&P and marketing are payed for locally. XXX YY spends lots and lots of money in advertising and promotions that we need to earn back through our locally produced bottles.Hmmm... so does this mean that what we saw in the previous articles is Coca-Cola Tbilisi running a price war against Coca-Cola UK? Seeing that the products are sold to us, the end-customers, at approximately the same price, someone in the system is making a profit at the expense of lorryloads of needless exhaust output in the environment. Reduced shipping costs (ok, as well as reduced raw materials cost and labour cost) are key arguments for decentralized production: this is turning the equation upside down?
Anders Jacobsen |