Financial Reporting [case study #2]

September 26, 2013

Introduction
As the most famous worldwide beverage reaches the last stage of the production line, it is shipped to an authorized bottler – a company which duty is to mix Coca-Cola’s syrup (or concentrates) with carbonated water and sugar before selling it in glass or tin containers. These bottlers can be categorized in three groups taking into account their dependence from The Coca-Cola Company (hereafter simply referred as Coca-Cola). First, there are the independently owned bottlers, which accounted for 34% of Coca-Cola’s production in 1998. Second, 11% of Coca-Cola’s bottlers are owned and controlled. And then, there are those in which Coca-Cola has invested but still has no control (55% in 1998). Anchor Bottlers is the name given to some of these bottlers in which Coca-Cola has minority interests. They account for the majority of Coca-Cola’s sales (43%), justifying their special importance for the company. They tend to be large, geographically disperse and financially burly. There were 10 companies under this label, by 1999. This rooting of Coca-Cola’s business operations aims to make the most of its subsidiaries, by exploiting their efficiency in producing, delivering and marketing Coca-Cola’s products. Nonetheless, the level of control and ownership is carefully studied based on these bottlers’ financial health, resources available at the time of the investment, and the need to share ownerships with other important business allies. An example of an anchor bottler is Coca Cola Enterprises (hereafter referred as Enterprises). This corporation is responsible, today, for the production and distribution of Coca-Cola’s products throughout all western and northern Europe. Enterprises is, itself, a union of many independent bottling groups, which have been acquired since the early 80’s. The goal of this