Coca-Cola profit fizzles as marketing costs take toll

THE world’s biggest soft-drink maker, Coca Cola, has said fourth-quarter profits fell 28% after it increased marketing to halt a decline in US sales.

Sales in the US rose for the first time in almost a year after Coca-Cola boosted spending 12% to $2.29 billion (€1.91bn).

Net income dropped to $864 million (€721.3m) on expenses to return overseas profit to the US.

Sales rose 6.7% to $5.6bn (€4.67bn), helped by gains in fast-growing markets including China, Russia and Brazil. Coca- Cola and Sprite had their highest volume growth rates in five years.

Chief executive E Neville Isdell said the firm had “arrested the decline and are making progress” in increasing sales with new drinks such as Coca-Cola Zero.

The company had $188m (€157m) in costs in the quarter as it returns $3.6bn (€3bn) in foreign profit under a US tax holiday. In the year earlier period, Coca -Cola earned $1.2bn (€1bn), the company said in a statement.

Isdell increased marketing spending by $400m (€334m) last year, most of it at the end of the year, as part of a two-year turnaround plan to revive sales and catch up with PepsiCo, the leader in non-carbonated drinks.

Coca-Cola said yesterday worldwide volume rose 4% during the fourth quarter, helped by growth on its Powerade sports drinks, Dasani bottled water and Minute Maid juices.

Global soft-drink volumes rose 2%.

Volume for Fanta rose 4%, helped by the introduction of new peach and black cherry versions.

North America volume rose 3% on demand for Powerade and Dasani further helped by a 1% rise in carbonated drink sales.

Volume in North Asia, which includes Japan and China, surged 17% on demand for sports drinks and beverages such as Hajime green tea and Orange Pulp by Minute Maid.

China and Russia each had 10% or greater volume growth. Brazil had 7%.

Coca-Cola’s EU volumes dropped 1% in the fourth quarter, hurt by weak demand for soft drinks in countries including Britain and France.

Volume increased in Germany and Spain.