SSC seals Pepsi divorce

Business > Economics

Rivals could profit during transition

Published: 30/04/2011 at 02:12 AM
Newspaper section: Business

Shareholders of Serm Suk Plc (SSC), the local bottler of Pepsi, yesterday voted unanimously to terminate the exclusive bottling contract and end the company's 58-year relationship with the US beverage giant PepsiCo.

Somchai Bulsook (right), the president and CEO of Serm Suk, confers with directors at yesterday’s shareholders’ meeting.

The decision paves the way for SSC to independently produce or distribute other beverages after the contract ends officially on April 1 next year.

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About the author

: Writer: Pitsinee Jitpleecheep; Position: Business Reporter

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franklin
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Discussion 13 : 01/05/2011 at 05:49 AM13
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So, after 58 years with Pepsi (which is about the time that Pepsi foolishly followed U.S. sanctions and pulled out of Rangoon, Burma and obviously came to Thailand) Serm Suk thinks they can manage on their own. This is so typically Thai-style R&D (Rip-off & Duplicate). And as Mr. Parinya boasts, “With our long experience in the beverage business, we're confident we can start a new business on the day after the contract with Pepsi expires". Remember these words! Though they gave not a word on the new flagship product that would equal Pepsi products that” made up 70% of the company's sales of 21.97 billion baht last year”
What I find astounding is that after 58 years with a Thai company and still having to go through 2 affiliates, Pepsi only owned 41.54% and not only had diminished voting rights but was ineligible to vote on cancellation even though they created 70% of sales. As I’ve always said,” I’ll spend my money here but I wouldn’t invest a single satang.
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coolit
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Discussion 12 : 30/04/2011 at 05:13 PM12
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Hurray no more Pepsi !!!
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mutley
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Discussion 11 : 30/04/2011 at 03:26 PM11
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Chang copied Carlsberg? I'm totally amazed. They taste nothing like each other. Carlsberg is probably the best lager in the world. Chang tastes like Fosters, sweet and sickly. Serm suk WILL regret this. Ever tasted the Indian ThumsUp which was Coke's replacement when Coke refused to divulge the formula. Cheap though!
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phetpeter
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Discussion 10 : 30/04/2011 at 01:15 PM10
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Pepsi have shown their greed,in the market. Pepsi don't want to do the work but want a large chunk of the profit. They will have one big headache coming, bottling plants, warehouses and trucks along with staff. Pepsi have made a very big mistake, and should have allowed the company its head considering they have a 40plus per cent in the company, it could have helped increase their market share! I bet Coke is looking at these problems carefully.
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lazar
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Discussion 9 : 30/04/2011 at 12:23 PM9
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Discussion 6: Your absolutely spot on
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Asian Hand
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Discussion 8 : 30/04/2011 at 12:07 PM8
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Pepsi will be up and running on its own sooner than you think and find alot more flexibility in carrying out their business. Not unlike W. Heinicke's split from Pizza Hut years back to form Pizza Company and both brands continue to co-exist. Its just business.
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dao
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Discussion 7 : 30/04/2011 at 11:13 AM7
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Thats OK because everyone knows Coke tastes better .
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banmebkk
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Discussion 6 : 30/04/2011 at 09:38 AM6
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They will definitely make more if they enter the market with their own beverage. Because consumers are very price sensitive in retail markets, big corporate companies don't increase prices on the products and they rarely accept price increases from manufacturers/bottlers, therefore bottlers have to absorb all the increase in price themselves, this cuts deeply into the margin as their margin is very small to begin with. On top of that they have to give Pepsi rebates and pay for part of their advertising cost. Rebates and advertising will add up to about 20% of the profit. If you go to korea, taiwan, japan, you will see majority people go for lifestyle drinks which outsells coke and pepsi as a group. I believe this is the direction they want to go into.
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bkktom
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Discussion 5 : 30/04/2011 at 08:28 AM5
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serm suk may regret this as their profits go
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barryw
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Discussion 4 : 30/04/2011 at 08:27 AM4
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They are ditching what is 70 percent of their sales? They must be VERY confident they can replace that with no-name brands, unlikely in brand-conscious Thailand.
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