Danone, Coca Cola pull plug on US water venture

18th February 2005, Comments 0 comments

PARIS, Feb 17 (AFP) - The French food group Danone and US drinks giant Coca-Cola are ending their joint venture in bottled water in the United States, with Coca-Cola buying out its French partner, the French newspaper Le Monde said Thursday.

PARIS, Feb 17 (AFP) - The French food group Danone and US drinks giant Coca-Cola are ending their joint venture in bottled water in the United States, with Coca-Cola buying out its French partner, the French newspaper Le Monde said Thursday.

The Coca-Cola board of directors was expected to approve Thursday the acquisition of the 49 percent stake that Danone owns in the joint venture, created in 2002, to distribute Dannon Waters and Sparkletts bottled waters, Le Monde said in a report dated Friday.

Under the terms of the acquisition plan, Coca-Cola will be licensed to manage the marketing of Danone bottled water brands Dannon Waters and Sparkletts, the report said. It already has a license for Evian.

Coca-Cola, which has its own brand of bottled water, Dasani, would commit to strengthening the marketing campaign for the French bands for the next five years.

Danone refused to comment on the report, stressing that "discussions with Coca-Cola have not ended."

Danone chief executive Franck Riboud had said Monday that his group had "reviewed" the distribution agreement with Coca-Cola, noting that it had "functioned more or less well".

Annual sales of Evian in the US have dropped from EUR 220 million (USD 287.7 million) four years ago to about EUR 76.5 million (USD 100 million), according to an estimate in November by Danone's finance and strategy director Emmanuel Faber.

In four years, Le Monde noted, US sales of Danone brands have dried up.

In 1999, Dannon Waters had 11.5 percent of bottled water sales in US supermarkets, while Evian had 8.14 percent.

Currently Dannon Waters and Sparkletts have a combined 5.5 percent share and Evian less than one percent, compared with Nestle bottled waters' 31 percent share and the combined 16 percent of Pepsico's Aquafina and Coca-Cola's Dasani.

© AFP

Subject: French News

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