Red Bull abandons Schweppes, takes over distribution

Posted by Daniel Palmer on 23rd July 2008

The five year association between Schweppes and Red Bull GmbH is about to come to an end.

In July 2003 Red Bull Australia and Schweppes formed a distribution alliance, with Schweppes to assist with sales, distribution and merchandising of the popular energy drink. In most countries Red Bull takes sole responsibility for distribution, but the association with Schweppes was made due to the strength of their network in Australia and the resulting ability to increase sales of the product.

The decision to sever ties with Schweppes is an interesting one as it leaves Red Bull with the difficult task of organising distribution, a challenge which will require significant investment. Schweppes, meanwhile, will lose one of their best selling products and it leaves them without an energy drink product to market in Australia.

As to the reasons for the decision, there has been a suggestion that Schweppes were becoming too demanding, although, it could relate to the fact that Red Bull is looking to expand and Schweppes simply may not feature in their plans.

They launched Red Bull Simply Cola earlier this year in Las Vegas and some European countries and perhaps an entry of this product into the Australian marketplace could be on the horizon. With Schweppes also responsible for distribution of Pepsi products in Australia, Red Bull may have seen that the time was right to move on.

Red Bull has also been undertaking aggressive expansion in the US, where they have been trialling the sale of their energy drink at McDonald’s outlets. The Austrian company may be seeking to complete similar deals here in Australia.

Currently, the Red Bull energy drink is the global market leader in an increasingly competitive beverage sector. In Australia, however, they rank second behind the Frucor-owned ‘V’, although they did report a sales increase of 44 per cent last year.

The change to distribution will come into effect at the beginning of next year.