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Hansen, Coke Set Monster Drink Distribution Plans |
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Monday, 06 October 2008 |
Chicago - Hansen Natural Corp said on Monday it has reached a deal for Coca-Cola Co and its largest bottler to distribute Monster Energy drinks in parts of the United States, in Canada and in six Western European countries.
Hansen said the deal with Coca-Cola and Coca-Cola Enterprises Inc will not affect its agreement with Anheuser-Busch Cos Inc, which includes distribution in bars across the United States.
Shares of Hansen fell 15 percent in morning Nasdaq trade.
The agreement comes after industry publication Beverage Digest reported on Friday that the companies were close to a deal. On Friday, Hansen shares jumped more than 11 percent.
Hansen's agreement with Coca-Cola and Coca-Cola Enterprises begins in November in the United States, Britain, France, Belgium, the Netherlands, Luxembourg and Monaco, and will take effect in early 2009 in Canada.
Hansen said it also has the right to negotiate distribution agreements with other Coca-Cola bottlers to service the areas not covered by Coca-Cola Enterprises.
Hansen said it would move some existing distribution arrangements to new distributors, including Coca-Cola bottlers and Anheuser-Busch distributors, and pay a termination payment to distributors that will be dropped as part of that move.
Hansen estimated a pre-tax expense of $110 million to $130 million related to the termination payments and to recognizing previous payments from distributors, but said the amount could be higher or lower. The company said payments from its new distributors would cover a significant portion of the costs of terminating deals with previous distributors.
In North America, the pact with Coca-Cola includes all Monster Energy beverages including Monster Energy and Java Monster, as well as the Lost Energy brand. In Western Europe, the agreement includes the distribution of Monster Energy.
Copyright 2008 AFX News Limited. All Rights Reserved.
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