Coca Cola 2007 Annual Report Download - page 8

principal differences involve the duration of the agreements; the inclusion or exclusion of canned beverage production
rights; the inclusion or exclusion of authorizations to manufacture and distribute fountain syrups; in some cases, the
degree of flexibility on the part of the Company to determine the pricing of syrups and concentrates; and the extent, if
any, of the Company’s obligation to provide marketing support.
Outside the United States
The Bottler’s Agreements between us and our authorized bottlers outside the United States generally are of stated
duration, subject in some cases to possible extensions or renewals of the term of the contract. Generally, these contracts
are subject to termination by the Company following the occurrence of certain designated events. These events include
defined events of default and certain changes in ownership or control of the bottler.
In certain parts of the world outside the United States, we have not granted comprehensive beverage production
rights to the bottlers. In such instances, we or our authorized suppliers sell Company Trademark Beverages to the
bottlers for sale and distribution throughout the designated territory, often on a nonexclusive basis. A majority of the
Bottler’s Agreements in force between us and bottlers outside the United States authorize the bottlers to manufacture
and distribute fountain syrups, usually on a nonexclusive basis.
Our Company generally has complete flexibility to determine the price and other terms of sale of the concentrates
and syrups we sell to bottlers outside the United States. In some instances, however, we have agreed or may in the
future agree with the bottler with respect to concentrate pricing on a prospective basis for specified time periods.
Outside the United States, in most cases, we have no obligation to provide marketing support to the bottlers.
Nevertheless, we may, at our discretion, contribute toward bottler expenditures for advertising and marketing. We may
also elect to undertake independent or cooperative advertising and marketing activities.
Within the United States
In the United States, with certain very limited exceptions, the Bottler’s Agreements for Coca-Cola Trademark
Beverages and other cola-flavored beverages have no stated expiration date. Our standard contracts for other sparkling
beverage flavors and for still beverages are of stated duration, subject to bottler renewal rights. The Bottler’s
Agreements in the United States are subject to termination by the Company for nonperformance or upon the occurrence
of certain defined events of default that may vary from contract to contract. The “1987 Contract,” described below, is
terminable by the Company upon the occurrence of certain events, including:
• the bottler’s insolvency, dissolution, receivership or the like;
• any disposition by the bottler or any of its subsidiaries of any voting securities of any bottler subsidiary
without the consent of the Company;
• any material breach of any obligation of the bottler under the 1987 Contract; or
• except in the case of certain bottlers, if a person or affiliated group acquires or obtains any right to acquire
beneficial ownership of more than 10 percent of any class or series of voting securities of the bottler without
authorization by the Company.
Under the terms of the Bottler’s Agreements, bottlers in the United States are authorized to manufacture and
distribute Company Trademark Beverages in bottles and cans. However, these bottlers generally are not authorized to
manufacture fountain syrups. Rather, as described above, our Company manufactures and sells fountain syrups to
authorized fountain wholesalers (including certain authorized bottlers) and some fountain retailers. These wholesalers
in turn sell the syrups or deliver them on our behalf to restaurants and other retailers.
In the United States, the form of Bottler’s Agreement for cola-flavored sparkling beverages that covers the largest
amount of U.S. concentrate sales (the “1987 Contract”) gives us complete flexibility to determine the price and other
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