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COVID-19 could threaten Coke supplies

Coca-Cola are the latest company to feel the squeeze from COVID-19 containment measures.

The Coca-Cola company have flagged potential product delays as it deals with supply chain issues for the sugar substitutes used in the diet and Coke-Zero ranges, which are sourced from China.

Releasing their annual report to the US Security Exchange Commission, the company acknowledged the challenges presented by the deadly virus.

“Our supply chain for non-nutritive sweeteners and certain other ingredients for our products includes suppliers in China. As a result of the outbreak of the Novel Coronavirus
COVID-19, beginning in January 2020, our suppliers in China have experienced some delays in the production and export of these ingredients,” it reads.

“We have initiated contingency supply plans and do not foresee a short-term impact due to these delays. However, we may see tighter supplies of some of these ingredients in the longer term should production or export operations in China deteriorate.”

While the company disclosed they held reservations surrounding the broader impact and unknown duration of the virus, they remain optimistic any affects would be short term.

“However, based on our current expectations, we believe this disruption will negatively impact our unit case volume and financial results for the first quarter of 2020. At this
time, we do not expect this disruption to have a significant impact on our full year 2020 unit case volume or financial results.”

A Coca-Cola Amatil spokesperson told C&I the Australian market was not affected.

“We are confident in our supply chain as we have limited sourcing from China and there will not be any impact on Australian consumers. As matter of routine, we maintain business continuity plans throughout the world including maintaining alternative procurement sources in other regions of the world,” they said.

It comes as the Australian government this week activated its emergency response plan for global pandemics, which at its extreme could see public events cancelled, and school and workplace closures.

However in a press conference yesterday, federal health minister Greg Hunt moved to reassure people, saying it the measure was to ensure they were prepared.

“What we’ve done, as you would hope that a government would do, is prepare for all eventualities. But so far in Australia, we have contained the virus on official medical advice,” he said.

“We’re not immune but we are as well-prepared as anyone else in the world.”

So far there have been more than 81,400 confirmed cases of the virus globally and more than 2,770 deaths and has spread to 48 countries. Italy, Iran and South Korea have been particularly hard hit.

The World Health Organisation are yet to declare the virus a global pandemic.

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2 Responses to COVID-19 could threaten Coke supplies

  1. Facts February 27, 2020 at 1:34 pm #

    This story is actually incorrect.. This story was first published in the US by CNN and relates to the American market. This is not at all in any way the case in Australia. Coke in Australia has limited sourcing from China and there will not be any impact on Australian consumers.

  2. nwhite February 27, 2020 at 2:06 pm #

    Hi @Facts,
    If you read the story, you will find that is indicated that the shortage was published by the Coca-Cola Company to the US Securities and Exchange Commission, which clearly outlines it is a US issue. There is also a quote from a Coca-Cola Amatil spokesperson saying the Australian market is not affected.

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