March 14, 2006
We're Fine, Thanks
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According to this article, 61 independent Coca-Cola bottlers are seeking an injunction against Coca-Cola Co. and Atlanta bottler Coca-Cola Enterprises to stop plans to change how Powerade is delivered to Wal-Mart Stores, Inc. Currently, independent bottlers deliver Powerade directly to Wal-Mart stores. Wal-Mart allegedly approached Coca-Cola and asked that bottlers make deliveries of the sports drink to its warehouses. Coca-Cola Enterprises, which is 38 percent owned by Coca-Cola and handles 80% of its U.S. sales volume, is set to test warehouse delivery in Texas on April 1.
Coca-Cola believes that this will lead to an increase of Powerade sales because Wal-Mart would give it better display. The independent bottlers disapprove of the change, claiming that the effective use of direct store delivery is superior to any other method. They also believe that this could set a precedent for future delivery of other Coca-Cola products and that a 1994 agreement prohibits warehouse delivery.
The independent bottlers filed two lawsuits-one in federal court in Springfield, Missouri and one in state court in Birmingham, Alabama. The injunction would prevent the warehouse delivery test from taking place on a national basis.