Coca-Cola Amatil reshuffles senior management

Sue Mitchell
January 31, 2018
AFR

Coca-Cola Amatil has temporarily reshuffled senior management after the interim head of its Australian beverages business was forced to step down earlier than expected due to ill health. 

Peter McLoughlin, who has been running Australian Beverages since the departure of Barry O’Connell last March, will step down immediately and take extended sick leave after battling ill health for several months.

The veteran brewer, who worked for SABMiller for almost 20 years before joining CCA in 2008, was originally planning to stay in the role until April 31, when new Australian Beverages managing director Peter West is due to start.

Mr West, whose appointment was announced in December, is managing director of dairy and drinks at Lion and must serve a long notice period before he can join CCA.

CCA’s group chief financial officer, Martyn Roberts, has been appointed interim managing director of Australian Beverages until Mr West arrives, while Paul Cooke, currently group general manager of financial planning and control, will fill in for Mr Roberts.

Group managing director Alison Watkins said it was important that Mr McLoughlin put himself, his health and his family first. 

“I want to recognise the huge contribution Peter has made to Coca-Cola Amatil, and the great affection and respect we have for him. He’ll be greatly missed by Coca-Cola Amatil,” Ms Watkins said.

The management changes come at a difficult time for CCA, which is struggling to maintain sales and market share as consumers shift away from carbonated soft drinks.

Discounting aggressively

CCA was also forced to raise prices across most of its beverages portfolio by almost 15¢ a bottle in November to recoup costs associated with the launch of the container deposit scheme in NSW on December 1.

The bottler has been discounting aggressively since November to minimise the impact of the price rises and reduce the price gap with rivals such as Asahi’s Pepsi/Schweppes and private label bottled water.

Macquarie Equities analysts believe the strategy has paid off and CCA’s Australian beverage volumes grew in the December-half after falling 3.9 per cent in the June-half.

However, the recovery in the second half will not be sufficient to counter first-half declines.

Macquarie expects earnings before interest and tax in Australian Beverages for the 12 months ending December to fall 5.4 per cent to $417 million after falling 13 per cent to $183 million in the June-half.

Group net profit is expected to fall about 1 per cent to $412.8 million, in line with management’s guidance for earnings to be “broadly” in line with profits in 2016.

Ms Watkins warned in November that a $40 million investment to accelerate growth in Australian beverages, combined with the impact of the container deposit scheme, would take a toll on earnings in 2018. 

The bottler is bringing forward cost savings and reinvesting about $40 million into reducing prices, boosting marketing, improving its sales execution, cold drink equipment and digital technology to counter structural shifts in the beverages market.

CCA shares rose 10¢ to $8.40 on Wednesday.