I've recently discovered some great news about our little (or shall i say big) friend CCL. I mentioned in my first post about how Pepsi have been cutting prices far below that of CCL. By doing so, CCL haven't been able to raise prices and with rising costs this is punishing their margins. However, what i didn't mention before was that CCL is a cost leader and Pepsi isn't. So, if Pepsi want to engage in a price-war with Coke they must be losing more money (or not gaining as much) as CCL. If this continues Pepsi might go broke. However, i don't think this is rational, so Pepsi will start rising prices again in the future. When this occurs, CCL will be in a position to begin rising prices again and thus alleviating the pressure on margins and earn more profits.
I did mention that CCL's problems are short-term and that this should be overcome in the medium-long term. In addition, i'm extremely confident in CCL's ability to continue to deliver in the medium-long term due to emerging markets.
As Buffett says "It doesn't matter what is happening, people will always spare 5 minutes to drink a coke."
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