Newsroom

Africa: Coca-Cola supply system wins award

30 September 2008

Coca-Cola’s system of distributing its products especially in the rural areas in Africa has received praise for its efforts towards developing small and medium sized businesses.

The Manual Distribution Centres (MDCs) model was recognised by three conferences – United Nations Private Sector Forum on the Millennium Development Goals and Food Sustainability, The Africa-America Institute Annual Awards Gala and the Clinton Global Initiative Annual Meeting held last week in New York.

While Coca- cola owns the brands and is responsible for consumer brand marketing initiatives, the bottling partners worldwide, who in Kenya for example include Nairobi Bottlers limited and Kisii Bottlers, manufacture the final branded beverages and also handle merchandising and distribution.

In Kenya, containers have been turned into MDCs forming a central pick up point for the retailers both in the rural and urban areas.

“Our efforts in East Africa supports entrepreneurs in their local economies by developing their talent and business acumen while also presenting significant benefit for our business,” said Nathan Kalumbu, president, Coca-Cola East and Central Africa.

Bottlers, in turn, work closely with retailers such as supermarkets, retail shops, Kiosks in order to channel the products to the end user who are mostly the consumers. The company estimates that it offers about 1.5 billion servings a day.

According to the company, there were approximately 1,800 MDCs employing over 7,500 people directly and generating over $500 million in revenue across Africa at the end of 2007.

Coca-Cola in May 2008, announced plans to boost the MDCs that will see it create between 1300 and 2000 new independent distribution businesses, or Manual Distribution Centres, between 5300 and 8400 new jobs and generate new revenue of between US $320 million and $520 million in African economies by 2010.

Though the bottling giant, has set up an “efficient distribution” through the MDC’s, it remained pessimistic about its future projections laying the blame squarely on the tax regime in the country.

A 10 per cent excise duty charged on soft drinks in Kenya and an additional 7 per cent sugar development levy for which only Kenyan players are charged increases the tax burden for the beverages giant for which it is also seeking an exemption.