Sugar giant Tate in Coca-Cola deal

Sugar group Tate & Lyle today said Coca-Cola was planning to use its Splenda sucralose sweetener in a new version of Diet Coke.

Tate, which makes sweeteners and other ingredients for food and drink firms, said Splenda would be used in a new addition to the Diet Coke range being launched in the second quarter of this year.

The move will increase the Diet Coke family to seven drinks including Diet Coke with NutraSweet, a caffeine-free version and flavoured varieties including lemon, lime, vanilla and cherry.

The new version will be called Diet Coke Sweetened with Splenda and will feature the Splenda logo on both the label and the packaging.

Shares in London-based Tate rose more than 7% yesterday after Coca-Cola North America announced the new version, but slipped more than 1% in early trading today.

Tate has experienced increasing success with Splenda, whose exceptional growth helped it boost half-year profits by 9.2% to £130m (€188.8m) in November. It bought the Splenda business last year from partners McNeil Nutritionals.

Tate said the Coca-Cola North America contract was part of its business plan and would have no material impact on its short-term earnings.

But it said in a statement: “It is further confirmation of the longer term market potential of Splenda sucralose.”

The current consensus among analysts is for profits of £238 million in the year to the end of March, compared with £228m (€331.2m) a year earlier.

The group runs more than 40 plants and 20 additional production facilities across 28 countries and employs 6,700 people in its subsidiaries and a further 4,800 in joint ventures.

Coca-Cola plans to run its Splenda version of Diet Coke alongside the NutraSweet variety and denied analyst speculation that it would eventually phase out the latter, reports said.