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Wal-Mart Cuts Cott's, Favors Cadbury

Cott Corp.'s stock dived about 38% on the Toronto Stock Exchange yesterday amid rumors that Wal-Mart would cut space and marketing support for the Sam's Choice brands it supplies. The stock dropped 20% the day before, following a report Friday that claimed Cadbury Schweppes would gain more shelf space at Wal-Mart for its Royal Crown and Diet Rite brands at the expense of Sam's Choice.

A Cott's spokeswoman says the investor reaction was understandable, but stresses the amount of shelf space lost is still up in the air. "Cott is still in active negotiation, nothing has been finalized," says Lucia Ross. The reduction will not affect Cott's bottled water products, Ross says.

Veritas Investment Research analyst Peter Holden says Cott is simply the victim of aggressive price competition from competitors with big pockets. "Cott promoted themselves heavily on the idea that store brands would drive Coke and Pepsi out of the market," he says. "Turns out not so much."



Read the whole story at The Financial Post »

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