Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Inchcape Joins Forces With Coca-Cola in Russia

LONDON -- The international motors and marketing group Inchcape plc said Tuesday it was extending links with the U.S. soft-drinks giant Coca-Cola Co. by investing in bottling franchises in six of the 12 largest cities in the Russian Federation.


The two, which have already linked up in Latin America, are also discussing other opportunities around the world, utilizing Inchcape's marketing clout in developing markets.


The new Russian franchises cover an area south and east of Moscow with a population approaching 50 million, including Nizhny Novgorod and Volgograd.


The move greatly expands Russian coverage for Coca-Cola, which fighting for markket share with the long-entrenched Pepsi Cola..


Only in April, it opened a $35 million plant in Moscow to produce its Coke, Fanta and Sprite brands. Added to a factory in St. Petersburg, that took investment to more than $100 million in activities that already employ 3,000 people in the country.


"We are very pleased to be able to announce this program aimed at significantly expanding our relationship with Coca-Cola," Inchcape chief executive Charles Mackay said. "As the world's most famous and successful brand name, Coca-Cola is a very important principal for us. We have developed a close working relationship with them and are keen to use our global marketing strength, local expertise and financial muscle to assist Coca-Cola in achieving its objectives in a number of countries."


As a first step in the investment topping ?25 million ($38.3 million)over three years, Inchcape is buying 11 percent of the Volzhsky brewery and soft-drinks business in Volgograd.


Soft drinks there will be separated from the brewery, with Inchcape as the majority shareholder with management control.


Inchcape has also been associated with Coca-Cola since 1983 in Chile, where it has five bottling plants after a ?30 million investment. Chilean sales are now ?60 million a year, making it Inchcape's largest activity in Latin America.


"Inchcape's unique strengths as an international marketing company with the know-how and financial strength to invest in a number of fast developing markets are attractive to Coca-Cola, and we are looking at a number of opportunities with them," said John Hunter, executive vice president and principal operating officer of Coca-Cola.


"We hope and expect to see the relationship expand strongly in the years to come," he added.


Inchcape, the world's largest independent motor distributor and product marketer, represents a wide range of firms in over 80 countries. Chief among them is Japan's Toyota Motor Corp., for which it has handled global sales for more than 25 years.


It also markets Nike sports shoes in the Far East and Rolls-Royce in China.


Inchcape shares added 3 pence to 460 in early trading on news of the Russian deal.