History And Expansion Of Coca Cola Amatil In Australia

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Discuss about the Coca Cola Origin in Australia.

It’s in 1904 that Coca Cola’s origin in Australia dates back to, wherein it started as the British Tobacco company. It was in 1964 that the company’s first foray came in with the Coca-Cola Bottlers purchase in Perth, and in 1972 this company was listed in the Australian Stock Exchange.

The company’s primary focus gradually then became the snack foods and soft drinks and was later renamed in 1973 as Allied Manufacturing and then in 1977 as Amatil Limited. It then began expanding its operations of bottling in Europe overseas, it then purchased 1982 the bottling plant in Australia and expanded further in the year 1987 into New Zealand and Fiji. In 1989 a majority of the company’s stakes got purchased by the Coca-Cola Company, although its ownership toda is at 29% ("Coca-Cola Amatil | Home" [2016]). The WD & HO Wills tobacco division was sold in year 1989 to the British American Tobacco company ("British American Tobacco Australia - British American Tobacco Australia" [ 2016]).

In the year 1992 the food operations were sold, and a new company, the Coca-Cola Beverages were spun off in the European operations in the year 1998. Its expansion continued in Asia, the Filipino bottling though was sold eventually to the parent Coca-Cola Company and San Miguel Brewery. The facilities of Coca Cola Amaltis is all over in Australia, the key sites being at North Sydney (NSW), Northmead (NSW), Moorabbin (Vic.), Richlands (Qld), Hazelmere (WA) and Thebarton (SA).

The CCA from 2006 to 2011 had with SABMiller a joint venture called the Pacific Beverages which was there for distribution of beverages in Australia.  The Foster’s Group was acquired in 2011 by SABMiller and in exchange the full ownership of the Pacific Beverages, the Samoa and Fiji operations was sold by Foster’s in 2012 to Coca-Cola Amatil.

The Coca Cola Amatil have about 19000 employees. Worldwide the statistics present that in the year 2011 there were some 146.2 thousand people who were employed in the company and this number continues to grow. In 201 the revenue of the company amounted in U.S. dollars to about 46 million. The global headquarters of Coca-Cola company is in Atlanta, Georgia, United States.

There are various regulatory frameworks in the country which have had and an effect on the company. There was much controversy that Coca-Cola was surrounded in when it opposed fiercely the public policy of Cash for Containers. This allegation of the company that they were using the wealth and power to an advantage that was unfair over a public regulation became prominent damaging the impression of the company. The allegation were supported even John Hyde by the WA former shadow minister. There were various allegations that were made against Coca Cola Amatil damaging their reputation. It was stated by Director of Corporate Affairs Coca-Cola Amatil Alec Wagstaff that the beverage industry had in fact spent quite a lot of money campaigning against the promoters of the Cash for Container Scheme which was the Green Party, since this regulatory obligation could cause damage to the profits of the company. There were similar tactics which were used in Western Australia by the beverage company and they were blamed for the rejection by the Government of the Cash for Container scheme despite the fact that the container-recycling rate of the states were a dismal 20 only.

Controversies and Regulatory Frameworks

The Coca-Cola Amatil along with Lion and Schweppes brough in 2013 an action against the Cash for Containers policy of the Northern Territory government which was also known as the legislation for Container deposit which as scheme for recycling stating that the same breach the Mutual Recognition Act 1992 ("Money for empties" [2016]) ("MUTUAL RECOGNITION ACT 1992" [2016]). There was a legal requirement that was created by the legislation that those goods which are imported into or produced in the 1^st State that may be sold in that state lawfully may be sold in the second state as well (2016). It was argued by the Beverage Companies that this Cash for Containers policy which had recently been introduced, and which within the limited time that it operated had double the recycling rate in Northern Territory by thirty percent, was hindering the said right which required that the company should implement for the same product different process of production in different territories and state (Radio National 2016). There is an exemption in South Australia from actions that is legal in nature as the scheme of Container Deposit here precedes the Act (Radio National, 2016). It was in favour of the Beverage Companies that the federal court ruled in favour of. There was a lot of public agitation that arose due to this judgment and the Facebook page of Coca Cola was bombarded and there were even demands of completing boycotting the product. This not only damaged the image of the company but also its production and profit for a considerable period of time (NewsComAu, 2016) (Packaging News | Jobs | Production | Design | Innovation, 2013). It was found according to a poll in 2008 called Clean Up Australia that there was 80% of the population which supported the policy of Cash for Containers a recycling scheme by which 20 cent deposit would be refunded to the customer as a reward for returning the container back. It was argued by the company that the Cash for Container policy was actually costly and ineffective and an alternative solution of National Bin Network was suggested by them.

This case highlighted the fact that the regulatory requirements for the company should be be uniform across the state. It is stated by the Mutual Recognition Act (Austlii.edu.au, 2016) that its purpose is the promotion of integration in the economy and between the participants increased trade. There will be one technique of regulation that the government will have to ensure that there is reduction in the regulatory impediments so that the services and goods can move across the jurisdictions. This purpose is a sound and required provision of the company. Since there is no proper compliance to it has led to there being for the company through proposed state and territory based deposit scheme of container and regulations for beverage and food that is state based and regulation of the beverage. For example the Government of NSW regulation that recently requires in which the standard food menu outlets should have on the menu the kilojoule counts of the food being served is adding to the company’s cost of compliance. .  

There is also fragmentation in the policies and programs for Emission reduction, policy for waste and water; this had led to there being an increase operation of the business nationally. There is no coordination and an inconsistency in the range of water, waste and energy policies and program at the Territory and State level and the Commonwealth, and also regulations which are duplicate, impose burden on the manufacturing sector of beverage and food which are not necessary.

The company further should not be interpreting the food label’s role in the merits of health or otherwise as that product which is within the total diet of the consumer. This should be an advice on the part of health and nutritional education and policy. The multiple regulations for traffic light labeling in the packet system’s from the main objective of which is the attempt of making the choice of food simpler for the consumers by putting a label on them based on the nutrient content whether they unhealthy or healthy. This categorization of the sale has only increased the cost of compliance for the company.

The commitment of CCA is towards beverage and food manufacturing in Australian which include the regional Australia as well. This is done by using of products which are available locally and employment of people that are local whenever the same is possible. However similar to the issues that are being faced by their peers as well, there are various operational challenges that the company faces, which includes, however is not limited to, rise in the cost of input, rate of exchange, support of consumer for innovation that is local, a regulatory burden which is increasing and a rise in the cost of business which is driven by social agenda and environment.

For the future viability of the company it is necessary for the government to support the abolition of the taxation of the state payroll for the sector of manufacturing, particularly in the sector of beverage and food. The depreciation that is accelerated in the re-equipment of the sector that is non-mining is proving detrimental for the company. The depreciation which is accelerated for the carbon and water emission which is in turn reducing the technology and equipment is further causing damage to the cost of company. There needs to a restoration of a level of Research and Development that is reasonable for the sector of manufacturing, in particular that of beverage and food manufacturing. There is requirement for a national system for product composition and labeling which is streamlined so that it is ensured that a product which has its manufacturing in Australia anywhere can be sold nationally and legally. This no uniformity is causing an increased cost of compliance for the company.

The high regulatory burdens are associated with cost of regulatory compliance which is high at the Federal as well as the Territory and State level. These include regulations and standards for food, social and environmental regulations, regulations for planning, requirements with respect to occupational safety and health and relations at the workplace. There being a lack, across the Commonwealth, Territory and State, of uniformity and problems related to jurisdiction as well. There are concerns related with the Clean Energy Legislative package of the government related to carbon pricing which has created on the company an additional burden on manufacturing local, and there is drive up in the cost as compared to the international competitors of the company where these burdens are not in existence or have been considerably subsidized.

An evident significant overlap which is there is between the regulation for Australian Consumer protection and Food Standards Code (ABC News, 2016). It is in the area of product representations and claims and application of claims which are misleading, deceptive and false which is a glaring example of this. There is an additional burden which is introduced on the company due to the over lapping of the Consumer and Competition Law which is overlapping with the State and Territory Food Act over provisions that are related to mandatory recall by notifying such incidents which have been associated with illness, death or serious injury.

With respect to the various anti-dumping agreements which are in place already, food dumping is major issue with the company. The company is advocating for easy and ready access to measures which will have a purpose which is clear for the prevention of goods which are being dumped in the country and proving detrimental to the company as well as the domestic sector (Bloomberg.com, 2016). The regulations provide an ability for competing on the global market equitably with the measures for anti dumping providing for equitable and transparent remedies, however it does not encourage or allow frivolous or vexatious claims. The measures of administration should be such that there processed in a timely manner such that the cost to the company is minimized as well the uncertainties which are there for the business and also provide a remedy that is swift to an injuring activity, or that may cause an injury to the domestic sector (Ausfoodnews.com.au, 2016).

There is an effect on the company by the international anti-free trade measures as well. While upon being a party to the agreement there has been a general benefit to the country due to there being a more open economy, there has been an impact on the sector dealing with food processing due to pressure that is there of competition that is global in the overseas market as well as at home. There is evidence of this pressure in the increase of imports of vegetable and fruits which are cheap and processed and decrease in the export steadily, a trend which has been long-term had been accentuated by the conditions of the current market due to the price of Australian dollar being high. This has resulted in the profits of the company being decreased due to the openness which has been introduced in the market.

References

Abc.net.au. (2016). PM - NT's container deposit scheme fails court challenge 04/03/2013. [online] Available at: https://www.abc.net.au/pm/content/2013/s3703117.htm [Accessed 20 Aug. 2016].

ABC News. (2016). One can a week is OK: Coca-Cola Amatil hits back in obesity row. [online] Available at: https://www.abc.net.au/news/2016-03-02/coke-one-can-not-harmful-coca-cola-obesity/7212744 [Accessed 23 Aug. 2016].          

Ausfoodnews.com.au. (2016). Coca-Cola-Amatil | Australian Food News. [online] Available at: https://ausfoodnews.com.au/tag/coca-cola-amatil [Accessed 23 Aug. 2016].

Austlii.edu.au. (2016). Mutual Recognition act 1992. [online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/mra1992221/ [Accessed 20 Aug. 2016].

Bata.com.au. (2016). British American Tobacco Australia - British American Tobacco Australia. [online] Available at: https://www.bata.com.au/group/sites/BAT_9RNFLH.nsf/vwlivelookupHomePage/HOME?opendocument [Accessed 20 Aug. 2016].

Bloomberg.com. (2016). Coca-Cola Amatil Apologizes After $367 Million SPC Writedown - Bloomberg. [online] Available at: https://www.bloomberg.com/news/articles/2014-02-18/coca-cola-amatil-apologizes-after-a-404-million-spc-writedown [Accessed 23 Aug. 2016].

Ccamatil.com. (2016). [online] Available at: https://www.ccamatil.com/-/media/Cca/Corporate/Files/Annual-Reports/2015/CCA166-CCA-Annual-Report-2015-WEB_final.ashx [Accessed 20 Aug. 2016].

Ccamatil.com. (2016). Coca-Cola Amatil | Home. [online] Available at: https://www.ccamatil.com/ [Accessed 20 Aug. 2016].

NewsComAu. (2016). Anger at Coke's successful bid to abolish Northern Territory recycling deposit. [online] Available at: https://www.news.com.au/national/anger-at-cokes-successful-bid-to-abolish-northern-territory-recycling-deposit/story-fncynjr2-1226590581256 [Accessed 20 Aug. 2016].

Packaging News | Jobs | Production | Design | Innovation. (2013). Coke under fire from angry consumers after successful bid to abolish container deposit scheme. [online] Available at: https://www.packagingnews.co.uk/news/coke-under-fire-from-angry-consumers-after-successful-bid-to-abolish-container-deposit-scheme-12-03-2013 [Accessed 20 Aug. 2016].

Radio National. (2016). Money for empties. [online] Available at: https://www.abc.net.au/radionational/programs/backgroundbriefing/money-for-empties/3588236 [Accessed 20 Aug. 2016].

Radio National. (2016). Money for empties. [online] Available at: https://www.abc.net.au/radionational/programs/backgroundbriefing/money-for-empties/3588236#transcript [Accessed 20 Aug. 2016].