
Coca-Cola beats on zero-calorie drinks, higher prices; to launch cane sugar-based drink
Food companies are increasingly lookingto include healthier substitutes as they respond to Health Secretary Robert F Kennedy Jr's Make America Healthy Again campaign.
Last week, President Donald Trump said Coca-Cola had agreed to use real cane sugar in the US.
While there are some slight differences between cane sugar and corn syrup as sweeteners, experts have said that too much of either is not good for consumers.
Coca-Cola already sells Coke made from cane sugar in other markets, including Mexico, and some US grocery stores carry glass bottles with cane sugar labeled "Mexican" Coke.
The switch to cane sugar will also drive up costs for the company, industry analysts have said. Changes in the formulation of the rest of the Coke sold in the US, and other beverages and candies, would involve significant adjustments to supply chains.
Rival PepsiCo, which topped quarterly earnings estimates last week, also said it would use natural ingredients in its products if consumers want it.
Coca-Cola reiterated that the hit to costs due to "global trade dynamics" remained manageable.
The company has said it would look at affordable packaging options such as plastic bottles when Trump imposed a 25% duty on aluminum imports. As of June, tariffs on aluminum imports have doubled to 50%.
Coca-Cola's comparable revenue rose 2.5% to $12.62 billion in the second quarter, beating estimates of $12.54 billion, according to data compiled by LSEG.
Annual comparable earnings per share is expected to be near the top end of its target of a 2% to 3% rise, helped by a weaker dollar.
Volumes fell in North America "due to the continued uncertainty and pressure on some socioeconomic segments of consumers," CEO James Quincey said on a post-earnings call.
Demand for pricey fizzy drinks has remained choppy in recent quarters, especially in developed countries as consumers, especially in lower-income segments, turned more price-sensitive.
Coca-Cola's volumes slipped 1% in the three months ended June 27 after rising 2% each in the previous two quarters, largely due to declines in key markets such as Mexico and India, as well as for its Coca-Cola brand in the US.
Quincey added that a boycott-related hit to demand in the US and Mexico was now largely resolved.
Volumes had fallen in the first half of the year in North America due to Hispanic consumers in the US and Mexico boycotting the company's legacy brands after a viral video of Coca-Cola laying off Latino staff and reporting them to Immigration and Customs Enforcement.
Prices rose 6% overall in the second quarter, led by increases in some inflationary markets.
Coca-Cola's shares have risen 12.5% this year, as of yesterday's close.
Coca-Cola Zero Sugar volume jumped 14%, driven by growth across all geographies, and was a bright spot in the quarter.
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Irish Times
2 hours ago
- Irish Times
Where does the EU-US tariff deal leave Ireland?
It is rare there is more consensus than division between Government and Opposition on the implications of a big policy moment. The domestic political response to the announcement of the deal that would allow the US impose a 15 per cent tariff on exports from the EU was markedly glum on both sides of the house. The Government was unable to muster anything more than a subdued acknowledgment it would 'bring clarity and predictability'. Coalition leaders have been saying for many months that tariffs are not good for anyone, so the confirmation that EU Commission president Ursula von der Leyen and US president Donald Trump had agreed a 15 per cent level was hardly something to be welcomed. 'We will now study the details of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here,' Taoiseach Micheál Martin said in his initial reaction. READ MORE Minister for Enterprise Peter Burke, speaking on RTÉ's Morning Ireland, did not specifically disagree with the earlier assessment of Ibec director general Danny McCoy that it was a capitulation. He said the EU was four days away from 30 per cent tariffs and the possibility of a prolonged trade war, which he warned would have been far more significant. That said, he did not shy away from the challenges the tariff would present for the Irish economy, not least the State's substantial exports to the US. On Monday, politicians on both sides of the House were still looking for clarity on the finer details of the deal. On the face of it, the Irish whiskey industry will find itself facing a higher tariff than its Scottish competitors (the UK has a 10 per cent tariff) though it might possibly benefit from carveouts announced for aircraft, chemicals and agri-food. The other key question for Ireland revolves around pharmaceuticals and if that sector (which is the main component of Irish exports to the US) will be subject to tariffs, or will face additional ones. Despite Mr Trump saying negotiations on pharmaceuticals would be separate, Ms von der Leyen indicated it was part of the agreement. Sinn Féin's enterprise spokeswoman, Rose Conway-Walsh, said the deal was 'nothing to be celebrated'. She also said she was very concerned about the lack of differential between North and South, and its repercussions for both economies and for supply chains. 'It is very obvious that there is a need for a package for business and for exporters,' she said. 'We have to protect jobs. We cannot have people losing their jobs.' The Labour spokesman on enterprise, George Lawlor, said a revised summer economic statement was needed as the one published this month was predicated on tariff levels of 10 per cent. 'We face uncertainty as to what's going to happen in the pharma sector. We also face uncertainty as to what's going to happen with the drinks industry. 'There's no doubt it's going to have serious implications. I think there was a prediction of some 45,000 jobs that would have a cloud hanging over them with a 10 per cent tariff. So with a 15 per cent tariff, that can only be a bad deal for Ireland.' Opposition figures pointed to what they said was the inherent weakness of the EU as a political bloc. Mr Lawlor said the US emerging with zero tariffs plus side deals seemed 'ludicrous' to him. 'The notion that we come away from this in a much worse position than when we went in is something that has to be seriously examined.' Edgar Morgenroth, professor of economics at DCU, said the deal did not give certainty. He referred to a deal Mr Trump did with Canada during his first term that he subsequently unpicked. 'Nothing is certain with this guy, except if you give him something, he will come back for more. So the whole strategy of going and negotiating was just stupid,' he said. He also criticised the lack of political cohesion within the EU. 'In Germany they worry about the German car makers. In Ireland, we had the whiskey makers. 'Every country sees itself like a country, and never sees the power of the bloc, and it means we are an easy target because you can kind of divide and conquer,' Prof Morgenroth said. In a worse-case scenario, if US multinationals reduced their presence in Ireland (as a result of Mr Trump's policies), and if there was also a change in the treatment of intellectual property (both big drivers of corporation tax), this would undoubtedly lead to a substantial 'fiscal shock' for Ireland, he said.


RTÉ News
2 hours ago
- RTÉ News
Is this EU-US trade deal a good one for Ireland?
Yesterday the EU and US reached agreement on a framework deal that ends months of uncertainty and avoids a full-blown trade war between the two blocs. While there is still a lot to be ironed out, there's a decent level of detail that has been announced. What's included in the deal? It introduces a 15% import tariff on most EU goods being exported to the US, which is half the 30% rate US President Donald Trump had threatened. This baseline tariff will apply across the board, including for Europe's crucial car manufacturing sector, pharmaceuticals, and semiconductors. However, there will be no tariffs on aircraft and their components, some chemicals and generic drugs, certain agricultural products, and critical raw materials. As part of the agreement, the EU has also committed to buying around €640 billion worth of US energy products over the next three years. This will largely involve purchases of US liquefied natural gas (LNG), oil and nuclear fuels. While Brussels has also said it will spend at least €515 billion on American military equipment. It's unlikely the deal will go much beyond those sectors in terms of what the EU agrees to buy from the US. For example, it's not expected the EU will have to commit to allowing in and buying more US beef as part of the broader agreement. What are we still not sure about? Some important elements of this trade deal still have to be thrashed out, such as what it will mean for the EU's dairy and spirits sector. Dairy and especially spirits, make up a huge chunk of Ireland's near €2 billion in annual food and drink exports to the US, so from an Irish perspective clarity in this area will be crucial. Essentially, we don't know yet for example if Irish whiskey exports to America will be subject to a 15% tariff. If so, that will have significant financial implications for the many distilleries here that rely heavily on the US market. Some sectors are also calling for clarity on whether exports going from Northern Ireland (NI) to the US will be treated differently to Republic of Ireland (ROI) exports to the US. America and the UK agreed a trade deal in May that included a baseline 10% tariff on many goods exported to the US, and this agreement includes goods being exported from NI. However, the dairy industry has pointed out that it operates on an "all island basis" with integrated supply chains and cross-border trade in raw milk, ingredients, and finished products. It says that any divergence in tariff treatment between NI and ROI (for example 10% for NI and 15% for ROI) could create huge issues and added cost for processors and farmers. Who pays the tariff? This means American-based companies will have to pay an extra 15% in tax to the US government on any goods they buy from the EU. These companies can either choose to absorb some or all of the cost of this extra 15% themselves, get discounts from the EU supplier they are buying from to cover the increase, or add the cost onto the price of the product, which would mean US consumers end up paying more. Ultimately though, the Irish and EU companies selling into the US will likely take a hit with this deal. US firms buying their goods may look for discounted prices to cover the new tariff rate, while if their products end up being more expensive in US shops then sales could drop if American consumers decide they are too expensive. So, while EU companies will be impacted financially by the new tariffs, it's worth noting consumers here will not have to pay any more as a result. They would only need to start worrying about higher prices if the EU implemented reciprocal tariffs on US goods. But that's far more unlikely now we have a deal. Is this a good deal for Ireland and the EU? It depends on your perspective. Right away, it takes the threat of an escalating trade war off the table. This adds a degree of certainty for EU businesses that hasn't been there for months. While they were hoping for no tariffs, there was a lingering threat of 30% tariffs - which is now gone. And while there is now a 15% tariff, at least they can makes plans in a more stable economic environment. That's what proponents of the deal are brings much-needed certainty. There are obvious benefits for the bloc's carmakers. Before this agreement there was a 27.5% tariff on cars being exported from the EU to the US, which will drop by 12.5.%. The US has a €200 billion trade deficit with the EU (meaning America buys a lot more from the EU than the other way around). EU Commission President Ursula von der Leyen has accepted that deficit needs to be cut. "We have to rebalance it," she said. However, not everyone in the EU is happy. Eurosceptic Hungarian PM Viktor Orbán said: "Donald Trump ate Von der Leyen for breakfast." French minister for Europe Benjamin Haddad said the deal is "unbalanced". Critics such as Haddad point out the EU is accepting a 15% tariff, while not placing a tariff on US goods entering the single market, and hasn't leveraged the scale and power of the single market as much as it could have in negotiations. But the dealmakers in Brussels will say the EU had much more to lose if there was no deal, given how much the bloc sells to the US, and that it's worth making compromises to protect more than €1.6 trillion in EU-US trade every year. What happens next? Over the next few weeks, European Commission and American officials will flesh out the agreement made yesterday. This is when we'll get more specifics on the spirits sector and issues around NI/ROI exports to the US for example. Then EU member states will have to approve the deal, which could come into effect before the end of the summer.


The Irish Sun
2 hours ago
- The Irish Sun
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