Coca-Cola said it has experienced a drop in sales in the first six months of 2024 as a result of the introduction of the deposit return scheme (DRS).
Publishing its half-year results on Wednesday, the company said Irish soft drinks volumes fell by “mid-single digits”, while energy products posted “high single digit” growth in tough comparisons. However, still drinks sold in the Republic declined by high single digits, driven by water, the company added.
“Volumes declined in the low single digits as consumers adjusted to the impact of the DRS launched in February in the Republic of Ireland,” Coca-Cola said.
However, it reported an improvement in volumes in its second quarter compared with the first three months of the year, when DRS was first introduced.
Despite its impact on volumes, Coca-Cola said the introduction of DRS in both Ireland and Hungary was “encouraging to see”, adding that it will continue to support the roll-out of “well-designed” schemes to ensure high rates of packaging collection.
The drinks giant also highlighted its recent acquisition of Irish vending services company, BDS Vending Solutions, adding that it anticipates the sale will be completed in the coming months as it currently remains subject to approval from the Competition and Consumer Protection Commission.
The company on Wednesday raised its annual operating profit and revenue forecast, helped by measures to mitigate the impact of high inflation and currency fluctuations.
Coca-Cola's organic earnings before interest and taxes (EBIT) in the first six months of the year grew by 7.5%, and the company's comparable EBIT reached more than 564 million euros.
The bottler said that for the full year 2024, organic revenue growth is expected to be between 8% and 12%, higher than the previous medium-term target range of 6% to 7%, while organic EBIT growth is expected to be within the range of 7% to 12%, up from previous estimates of 3% to 9%.
Coca-Cola has a long-standing presence in Ireland, employing more than 300 people in the Republic and a further 450 in Northern Ireland.
Demand for packaged foods and beverages has remained resilient despite rising prices, and a gradually improving economic environment has boded well for beverage makers.
However, the company said it was aware of an uncertain consumer environment and added that it expects the macroeconomic and geopolitical context to remain challenging in the second half.
U.S. beverage giant Coca-Cola, which owns more than 20 percent of the bottler, last month raised its annual sales and profit forecasts due to the expected benefit of price increases and an advertising offensive, mainly in international markets where demand for its soft drinks and juices has been relatively strong.
Additional information from Reuters.