Local Coca-Cola bottler could be on the market

Coca-Cola Amatil said yesterday that it may sell part or all of its fully-owned subsidiary the Coca-Cola Korea Bottling Company. In a statement, the Australia-based company, which is 32-percent owned by the Atlanta-based Coca-Cola Company, said it is working with its American counterpart and consulting groups to evaluate the Coke business in Korea.
Coca-Cola Korea Bottling Company is in charge of producing, distributing and selling several soft drink brands here, including Coca-Cola. Another company, Coca-Cola Korea, provides the “secret” solution to the factories and markets the brand.
Coca-Cola Korea bought production facilities and sales networks from Doosan, Woosung Food Co. and Honam Food Co. in 1997 for 1.2 trillion won ($1.3 billion) to form Coca-Cola Korea Bottling. The next year, it sold it to Coca-Cola Amatil. No one at Coca-Cola Korea was available yesterday for comment.
Last year, the Korean Coke maker made a net profit, but the previous year, it saw losses of 34.3 billion won. Last year’s profits would have been higher, but there was a major Coke recall because of a scandal involving toxins in drinks.
Coca-Cola was not responsible for the problem, but was criticized since it took no action even after being blackmailed for 3 billion won by a person with video of toxins being injected into Coke bottles. The recall only took place after a woman fell sick from drinking one of tainted cokes.
Coca-Cola Korea Bottling manages three plants in Yeoju, Gyeonggi province; Yangsan, South Gyeongsang province; and Gwangju. There are about 2,200 workers at those three facilities, and the beverages made there are distributed to more than 100,000 outlets.
Coca-Cola Korea Bottling currently occupies 48 percent of the Korean carbonated beverage market. Aside from Coca-Cola, the company manufactures the brands Fanta, KIN Cider, Powerade, Minute Maid and Nescafe.
But industry analysts say they are not sure whether other beverage companies would be interested. Although Coca-Cola has a very strong distribution network, it is still suffering from the aftermath of the toxin scandal.
Last year, Woongjin Foods, CJ, and Dongwon F&B were rumored to have contacted Coca-Cola about possible takeovers, but the firms refused to confirm those reports. The Israeli bottling firm CBC also toured the factories last October, but they did not mention why.

By Wohn Dong-hee Staff Writer [wohn@joongang.co.kr]