Coca-Cola attributes fall in Irish volumes to deposit return scheme 

Company said Irish volumes fell by mid-single digits for sparkling drinks, while still beverages declined by high-single digits

"Volumes decreased by low-single digits, as consumers adjusted to the impact of the DRS launched in February in the Republic of Ireland," Coca-Cola said

Coca-Cola HBC said it has seen a drop in sales in the first six months of 2024 as a result of the introduction of the deposit return scheme (DRS). 

Publishing its half-year results on Wednesday, the company said that Irish sparkling drinks volumes fell by "mid-single digits," while energy products delivered "high-single-digit" growth on tough comparatives. However, still drinks sold in the Republic declined by high-single digits, driven by water, the company added.

"Volumes decreased by low-single digits, as consumers adjusted to the impact of the DRS launched in February in the Republic of Ireland," Coca-Cola said. 

However, it reported an improvement in volumes in its second quarter relative to the first three months of the year, when the DRS was first introduced.

Despite its impact on volumes, it said the introduction of the DRS in Ireland as well as in Hungary was "encouraging to see," adding that it will continue to support the launch of "well-designed" schemes to ensure high packaging collection rates. 

The drinks giant also noted its recent acquisition of Irish vending services firm, BDS Vending Solutions, adding that it anticipates the sale to be completed over the coming months as it currently remains subject to approval by the Competition and Consumer Protection Commission.

The company raised its annual operating profit and revenue forecast on Wednesday, helped by measures to mitigate the impact of high inflation and fluctuations in currency.

Coca-Cola's six-month organic earnings before interest and taxes (EBIT) grew 7.5%, with the company's comparable EBIT reaching more than €564m. 

The bottler said for the full year 2024, organic revenue growth is expected to be between 8% and 12%, higher than the previous mid-term target range of 6%-7% while organic EBIT growth is expected to lie within the range of 7% to 12%, up from the previous estimates of 3% to 9%.

The bottler has a long-standing presence in Ireland, employing more than 300 people in the Republic with a further 450 in Northern Ireland. 

Demand for packaged beverages and food has stayed resilient despite price hikes, and a gradually improving economic environment has bode well for beverage makers.

The company, however, said it was mindful of an uncertain consumer environment, adding that it expects the macroeconomic and geopolitical backdrop to remain challenging in the second half.

US beverage giant Coca-Cola, which owns more than 20% in the bottler, last month raised its annual sales and profit forecasts on the expected benefit from price hikes and an advertising blitz, mainly in international markets where demand for its sodas and juices has been relatively strong.

Additional reporting from Reuters.