Coca-Cola Co., bottlers reach resolution

The Springfield-based bottling company spearheaded a federal suit in February 2006 against both Atlanta-based The Coca-Cola Co. and its largest bottler, Coca-Cola Enterprises. The suit alleged the two companies planned to deliver Coca-Cola’s PowerAde product to Wal-Mart via warehouse drop-off points, instead of directly to the stores as had been done previously.

An agreement announced Feb. 12 says Coca-Cola Co. and its bottlers now will work together in exploring alternative delivery methods. Though neither side would disclose terms of the new decision process in place, they say it creates transparency and ensures all products will be evaluated individually when deciding on delivery methods.

“We all agreed this was an issue, and now we’re working together to find a way to address it together and for the benefit of everyone,” said Coca-Cola Co. spokesman Dan Schafer.

That appeases the bottlers, according to Sally Hargis, Ozarks Coca-Cola vice president of corporate strategy, because while they weren’t against the idea of warehouse delivery, they did object to Coca-Cola Co.’s decision to look into it without considering other bottlers.

“We’re not against looking at new ways of distribution; we just want them to be assessed fairly and equitably,” Hargis said. “Now we believe they will be.”

Hargis added that warehouse delivery will happen on an experimental basis, but all bottlers will be aware of it and will be involved in the decisions about those trials.

In the instance of PowerAde, Hargis said the sports drink would undergo the new evaluation system before a decision is made on its most effective delivery method.

In the suit, originally filed in Springfield’s U.S. District Court before being moved to Atlanta, the bottlers argued that direct-to-store delivery was best because it allowed the distributor to control a product’s appearance, availability and freshness at each store.

The attitude has shifted slightly, as the bottlers agree that warehouse delivery could be a better fit for some products – specialty drinks that could be sold at niche stores – or a better fit for some retailers that might only accept Coca-Cola products through warehouse delivery, Hargis added.

“It allows for some exploration of alternative routes to market for specific products,” she said.

The bottlers, which are responsible for 10 percent of Coca-Cola’s U.S. volume, have said the direct contact between the manufacturer and the customer is the driving force behind product marketing and sales.

If the bottlers find that the new decision-making process for product delivery isn’t satisfactory, Hargis said the agreement allows them to revisit the lawsuit.