Schweppes officially on the market?

Posted by Daniel Palmer on 8th August 2008

Cadbury has informed the Australian Competition and Consumer Commission (ACCC) that they are proposing to sell their beverage business in Australia.

Rumours had been circulating for months that a sale was on the cards following the demerger of Cadbury-Schweppes in the US which left Australia as the only country where Cadbury’s confectionery and beverage units were combined. Coca-Cola Amatil (CCA) CEO Terry Davis has also fuelled rumours of a Schweppes sale by indicating CCA would be interested in purchasing Australia’s second largest soft drink bottler at CCA AGM earlier this year.

Cadbury announced last month that a review of their Australian beverage operations would be conducted to determine the way forward for the business. There was no mention of a sale but changes were flagged. “As it relates to our portfolio and following the demerger of the Dr Pepper Snapple Group, we intend to review the position of our remaining beverage business,” a statement from the company reported. “While this business is integrated with our confectionery operations in Australia, we have been separating key commercial functions, primarily to improve the focus on the individual categories of confectionery and beverages.”

The ACCC are now monitoring the situation, with Japanese giant Kirin and Coca-Cola Amatil, Australia’s largest soft-drink bottler, reportedly considering making a play for Schweppes. Both companies would need to gain regulatory approval from the ACCC, which may prove difficult to come by given their extensive operations in Australia.

Cadbury’s review is due to be completed by October and, if a suitable sale cannot be arranged, expect a demerger of their confectionery and beverage divisions here in Australia.