Coca-Cola Amatil to re-enter bottle manufacturing?

Posted by James Ferre on 30th July 2009

Australia’s largest soft drink producer, Coca-Cola Amatil, is considering making its own plastic bottles once again, seven years after selling their bottle manufacturing operations.

The Australian bottler of Coke is seriously considering the proposal, according to a report in today’s Australian Financial Review.

Amatil sold their bottle manufacturing operations to Visy in 2002 for $157 million as they focussed on manufacturing, selling and distributing their beverages. However, improvements to manufacturing technology in recent years has forced the company to re-examine the prospect of producing their own bottles.

Analysts have suggested the talk could merely be a way to put pressure on their suppliers. Visy has been a long-term supplier of PET bottles since the sale, with aluminium cans provided by Amcor. Both were involved in a price-fixing scandal that placed pressure on their relationships with customers.

CEO Terry Davis, who is intent on organic growth while market prices remain inflated for suitable takeover tagrets, first reported the option of establishing Amatil’s own plastic and aluminium packaging operations in February this year. At the time it was suggested that both Amcor and Visy could play a role in the “self-manufacturing” operations.