Coca-Cola beverages available on Russian market, its subsidiary still profiting, Bloomberg reports
Coca-Cola Company beverages can still be found in supermarkets across Russia, with profits from Coca-Cola sales in Russia now flowing to its subsidiary, Coca-Cola HBC.
Source: Bloomberg
Details: After the start of the large-scale war, Coca-Cola Co. was one of the first corporations to promise to exit Russia. The company asked its partners in Russia to remove goods from stores, cease syrup supplies, and halt production.
Reportedly, two years later, the distinctive red Coke logo is still easily found in supermarkets and restaurants across the country. Additionally, a new product called Dobry Cola, sold in cans of familiar red colour and with a taste that few can distinguish from the original, has by some measures kept Coca-Cola as the leading producer of carbonated beverages in Russia.
This is possible because Multon Partners, which bottled Coca-Cola in the country, belongs to a separate London company, Coca-Cola HBC, in which the American parent company owns 21% of the shares.
When HBC ceased production of the cola following the major war, Multon released Dobry Cola. It became the most popular carbonated water in the country, holding 13% of the market.
"The profits from selling Coca-Cola in Russia have merely shifted to Coca-Cola HBC, which has taken market share through the success of Dobry," says Garrett Nelson, an analyst at CFRA Research.
Original Coca-Cola is imported from neighbouring countries such as Georgia and Kazakhstan. After the invasion, Russia passed a law allowing branded goods to be sold without the trademark owner's consent. Thanks to this import, Coca-Cola has become the third most popular carbonated beverage in Russia, capturing 6% of the market.
Background:
- Coca-Cola stated that the trademark applications filed in Russia are intended to preserve intellectual property rights, particularly because third parties worldwide have long sought to exploit the company's product reputation.
- PepsiCo has banned references to the war in its advertising strategy in Ukraine.
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