Coca Cola buys Alpine water

Coca Cola is muscling in on the lucrative market for bottled water swissinfo.ch

With its first entry into the European mineral water market, the United States soft drinks giant, Coca Cola, has snapped up the Swiss company, Valser.

An industry analyst described the acquisition as an “attack in the heart of Europe”.

The move follows unprecedented growth in the bottled water market compared with stagnation in the soft drinks sector.

Valser, which sold 122.5 million litres of bottled water last year, is one of the top three players in Switzerland.

Lot of bottle

“It’s a long-term strategical decision by Coca Cola,” said Cédric Böhm, a food financial analyst with Pictet, the largest Swiss private bank, in Geneva.

“They started in North America and now they are reinforcing their presence in Europe.”

The soft drinks market has been growing globally at about two to three per cent a year while bottled water has seen a yearly growth rate of ten per cent over the past decade.

Valser along with Henniez and the private label distributor, Migros, each have about a 16 per cent market share in Switzerland.

Water wars

For many years the Swiss food giant, Nestlé, and the French group, Danone with its Evian brand, have dominated the world’s bottled water market.

“The fact that Coke and Pepsi and at a lower level Cadbury Schweppes is also trying to enter the market certainly makes it more and more competitive,” Böhm told swissinfo.

“Until now the pressure was mainly in North America where the soft drink producers were very active and everybody expects an increase in pressure in the emerging markets but now the attack is fairly in the heart of Europe.”

Böhm said similar moves could be expected in the future but he dismissed suggestions that corporate Switzerland was being swallowed up by American firms.

“From our side, we see all these symbols but you should not forget that the Swiss are also fairly aggressive in terms of expansion overseas. Nestlé, for example, has been extremely active in acquisitions and a lot of long-term American brands are in Swiss hands.

No job losses

Switzerland’s Hess Group, the previous owner of Valser, sold its 50 per cent stake to Coca Cola for an undisclosed sum. The Swiss competition commission still has to approve the deal.

All 96 employees in Switzerland are expected to keep their jobs. Some 69 people work at the production plants in Vals and Zisers in canton Graubünden and another 27 in administration in Bern.

Coca Cola is the world’s largest beverage company and is the leading producer and marketer of soft drinks.

Valser and Coca Cola have enjoyed long-term distribution agreements in Switzerland.

In June, Coca Cola and Danone announced a partnership agreement for bottled water spring and source water brands in the US.

The Swiss drank 769 million litres of mineral water in 2001, and the market grew by 7.8 per cent last year.

swissinfo