Coca-Cola to axe returnable bottles
Coca-Cola Enterprises (CCE) has defended its controversial decision to become the first major soft drinks company to axe returnable bottles.
In what is the biggest shake-up to the soft drinks market in the last 10 years, the company is to withdraw traditional baby mixers and splits from the on-trade from March.
The 113ml and 180ml Schweppes mixers and 180ml Coke will be replaced by 125ml and 200ml bottles in recyclable glass in a bid to improve quality of the package and appeal to younger drinkers.
Unveiling details of the scheme exclusively to thePublican.com, CCE said its research shows that the costs of recycling - in both financial and environmental terms - will be outweighed by gains in efficiency and profitability within the pub and in the supply chain.
But not everybody has applauded the move, which has already cost CCE a staggering £12m in installing new bottling equipment. Competitor Hartridges slammed the decision, claiming it will drive up costs for pub companies which will have to recycle more bottles.
Neither the licensee nor pub customers will see any benefit, argued Hartridges managing director Martin Hartridge. "After the publican has added his margin and VAT to the 125ml bottle and passed on the increase to his customers, he will not be giving any added value for the very small additional quantity," he said.
"Will the customer even notice the extra 0.4 fluid ounces in the glass? I very much doubt it."
But Rob Sutton, CCE's channel marketing controller, was keen to dispel the negativity surrounding the change. He said the trade had generally welcomed the news, saying it was long overdue.
"Our trade customers have been very positive about the changes," he said. "People want a larger bottle, longer drinks and better value for money and we're responding to this."
Scottish and Newcastle Retail, one of CCE's biggest customers, said it was not concerned about the change because it already recycles all its bottles.
While soft drinks as a whole are showing strong growth, the mixers category in the UK is shrinking at the rate of a million cases, worth £7m, a year.
CCE believes that dumping returnables could halt the decline.
Glen Goodwin, business controller for CCE, dismissed claims that it would mean more expense for licensees.
"The individual licensee won't have to pay any more as they are often able to recycle for free and larger pub companies will make their money back because they will get a bigger return on bottles," he said.
The 200ml bottles will be introduced in March and the 125ml in July. CCE's main competitor, Britvic Soft Drinks, could be forced to follow its rival's lead. The company said it was aware of the change but would not be issuing a statement yet.
