FEMSA sells PH operations back to Coca-Cola as profits plunge due to TRAIN
The Mexican giant is packing up after new taxes on sodas weighed down operations in the Philippines.
Coca-Cola FEMSA announced on Thursday, Aug. 16 that their board has moved to sell their majority stake in Coca-Cola Philippines back to the Atlanta-based The Coca-Cola Company.
This would wrap up a five-year deal which started in 2012 where FEMSA paid $688.5 million to the US firm in order to run operations in the Philippines.
John Murphy, president for The Coca-Cola Company’s Asia Pacific Group, said in a statement that Coca-Cola Philippines will now be managed under the main firm’s Bottling Investments Group and will remain business as usual.
“We are very confident in both the opportunity that lies ahead and the plans that we have underway to capture the potential of this important market. We look forward to continuing our strong ties in the Philippines, where we have been in operation for over 100 years,” Murphy said.
The tax reform law imposed a P6 per liter excise tax on sugar-sweetened drinks and P12 per liter for beverages with high fructose corn syrup.
A report from Coca-Cola FEMSA showed that comparable operating income has dropped by a whopping 40.1 percent during the second quarter of 2018 versus a year ago.
“Comparable total revenues increased 27.7% during the second quarter of 2018, driven by an average price per unit case increase as an adjustment to the excise tax, partially offset by a 4.0% volume decline,” the report read.
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