304-629-1

ECCH Collection

Coca-Cola’s Re-entry and

Growth Strategies in China

This case was written by Suchitra Jampani, under the direction of Sanjib Dutta,
ICFAI Center for Management Research (ICMR). It is intended to be used as the
basis for class discussion rather than to illustrate either effective or ineffective
handling of a management situation.
The case was compiled from published sources.

© 2004, ICFAI Center for Management Research (ICMR), Hyderabad, India.

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 304-629-1

COCA-COLA'S RE-ENTRY AND GROWTH STRATEGIES IN

CHINA
"Putting cold bottles on shelves is the best marketing we can do, we don't have to ask ourselves if
our product will sell, only, how do we get it to the consumer?"

x E. Neville Isdell, chairman and CEO, The Coca-Cola Company, in a trade publication in
1992.1

"Any of you with experience operating in China know that to have a shot at success, you've really
got to take the time to invest in the country. China is large and diverse and it's a long-term
proposition. So you have to make the effort to patiently and diligently build your business over
time. That's where our focus was decade after decade and our results today prove the wisdom of
this approach."

x Patrick T Siewert, President, East and South Asia Group, The Coca-Cola Company, at
The Eight Annual International Conference on "The Future of Asia" in 2002.2

INTRODUCTION

The Coca-Cola Company (Coke) re-entered China in 1979. Today it is recognized as one of
China's most trusted brands according to Interbrand.3 It was voted number 5 of the top 10
multinational companies doing business in Asia in the 2003 Review 200,4 a survey conducted by
Far Eastern Economic Review (FEER).5 Since 1990, it has been making profits in China and
according to AC Nielsen,6 it had a market share of over 50 percent share of the Chinese
beverages market in 2002.

How did Coke achieve this success in China? Both Coke's top managers and industry observers
believed that it was the company's winning approach of “Think local, act local” that had enabled
it to capture markets outside United States. This was particularly true of the Asian markets where
the diversity of cultures and income levels made for a rather diverse consumer base. Coke
encouraged local managers to develop strategies that were best suited for their areas, and regional

1
Leslie Chang in Kunyang, China and Chad Terhune and Bets Mckay in Atlanta, USA, “Coke’s big
gamble in Asia: Digging deeper in China, India,” The Wall Street Journal, August 11, 2004.
2
Press center, www.coca-cola.com.
3
Interbrand is a global brand consultancy firm founded in 1974. It attempts to identify, build and express
the right idea for a brand, so that positive business results can be achieved.
4
Review 200 is a survey designed to identify the companies that Asia's business people regard as leaders in
their class.
5
FEER is one of Asia's leading business magazines, published every Thursday in Hong Kong. It is fully
owned by Dow Jones & Company, the publishers of Wall Street Journal. The magazine covers politics,
business, economics, technology and social and cultural issues throughout Asia, with a particular emphasis
on Southeast Asia and China.

6
AC Nielsen, a market research company, was established in the United States of America by Arthur C.
Nielsen Sr. in 1923. It gradually spread its operations allover the world. In 2001, AC Nielsen became part
of VNU, a world leader in marketing information, media measurement and information, business media
and directories.

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offices had the freedom to approve local initiatives.

From the very beginning, Coke's strategy for re-entry into the Chinese market had been based on
localization of the entire Coca-Cola system. In order to achieve this, Coke had to work closely
with Chinese state-owned enterprises and develop strong relationships with the Chinese
government. Since China had just opened up to foreign investment at the time of its re-entry,
Coke had to deal with its restrictive policies. It brought its technology and equipment to China
and built bottling plants, which it then handed over to the Chinese government. Later it formed
joint ventures with state-owned enterprises to set up more bottling plants. Coke formed joint
ventures with local Chinese companies as well. Even though initially it had to import certain
inputs for the production process, Coke eventually sourced them from Chinese companies. Coke
developed its own infrastructure for distribution but gradually came to mainly rely upon state-
owned distribution companies and local Chinese distribution companies. This strategy of
localization of the Coca-Cola system in China proved to be a success and China grew to be its
second largest market in Asia in 2003 (in terms of volume).

BACKGROUND NOTE

In the early 1920s, Coke made its entry into China with bottles imported from its plant in the
Philippines. In an effort to localize production, two bottling plants were opened in 1927. These
plants were located in Shanghai and Tianjin, and in 1930, another was opened in Qingdao. Coke
faced setbacks during the World War II when the Japanese occupied China and took over its
plants. However, in 1946, after the war ended Coke opened a bottling plant in Guangzhou. The
Shanghai plant had the distinction of being the most up-to-date and fastest bottling line in China,
and in 1948 became the first overseas plant to make annual sales of more than 1 million cases.
This was great progress for Coke, even though the customers in Shanghai were mostly
expatriates.

When the People's Republic of China (PRC) was formed in 1949, all foreign companies were
asked to cease operations and leave the country. Coke shut down operations in China and its
bottling plants were nationalized by the government. State owned companies were formed to
produce beverages and some of these companies used the former Coke plants to produce soft
drinks. In case of the Shanghai plant, the equipment was shipped to Beijing to be re-installed in a
factory there. For almost 30 years after the PRC was formed, foreign direct investment and direct
production activity by a foreign company were not allowed. Only the state-owned foreign trade
corporations were allowed to have contact with foreign businesses and to carry out exporting and
importing of goods.

Coke's Re-Entry in China

In December 1978, Deng Xiaoping (Deng)7 announced the ‘open door policy’. This policy was
part of Deng's larger plan for economic reforms in China. An open door policy meant that China
would allow foreign trade and investment. December 1978 was an important time for Coke as
well. Soon after China made its announcement, Coke initiated discussions with the Chinese
government. Coke expressed its commitment to making long-term investments and to economic
development in China.

In 1979, Coke began importing cans from California and bottles from Hong Kong to sell in

7
Deng Xiaoping was the Vice-Chairman of the Central Committee. The Central Committee is the highest
authority within the Communist Party of China, the sole political party in the People's Republic of China.
He was also the Vice-Premier of the State Council, which is the chief civilian administrative body of the
country. The State Council is chaired by the Premier and consists of the heads of each governmental
department and agency. There are about 50 members in the Council

3
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China. Initially, these were sold only to foreigners through hotels and special stores called
friendship stores where only foreigners could shop. Even though Coke made its re-entry into the
Chinese market with imported products, its intention was to localize every aspect of the business
from sourcing inputs and production to sales and distribution, eventually. Establishing the
localized Coca-Cola system in China was a difficult and a long process. China had opened its
doors to foreign companies but at the same time, had set in place policies to control and closely
monitor the foreign investments. Most areas of business were heavily regulated and needed
approvals from various government officials. Nevertheless, Coke was determined to establish
itself in China.

LOCALISATION STRATEGIES

Long before Coke was given permission to sell its products to the Chinese people, it began
developing production capabilities through various joint ventures with the Chinese government.
In sharp contrast to its strategies in the past (in China and other countries as well), initially Coke
did not own any bottling plants in China. It imported the concentrate and sold it to bottling plants.
The bottling plants (that it sold the concentrate to) had been built by Coke and handed over to the
Chinese government. The first of these plants was built in Beijing and was operational in 1981.
According to an agreement between Coke and the state-owned China National Cereals, Oils, and
Foodstuffs Import and Export Corporation (COFCO) in 1980, Coke agreed to build a plant and
hand it over to the government in exchange for approval to expand distribution and sales in
China. The second bottling plant was built in Guangzhou and was also handed over to the
Chinese government in 1982. However, this time it was agreed that both plants would pay for the
concentrate supplied to them. This agreement was approved by the Chinese government's Export
Committee, of which President Jiang Zemin was also a member.

In 1983, Coke began constructing a bottling plant in the Xiamen SEZ8, and on completion in
1984 handed it over to the Ministry of Light Industry. This Ministry later became the State Light
Industry Bureau. The year 1984 was a special year for Coke as many significant events took
place that year. In 1984, the plant in the Xiamen SEZ, in addition to producing Coca-cola also
started producing Sprite and Fanta. Coke became the first company to air a foreign commercial
on China’s Central Television station (CCTV). Even though Coke's products were not sold to the
Chinese at that time, it decided to advertise in order to develop brand recognition. Coke was
allowed to air its commercials in exchange for underwriting CCTV's coverage of the Queen of
England's trip to China. In 1984, Coke signed an agreement with the Ministry of Light Industry to
establish its first joint venture in China, a bottling plant in the Zhuhai SEZ. Construction of this
plant began in 1984 and it became operational in 1985.

In 1984, the Chinese government signed a letter of cooperation with Coke to set up cooperative
bottling plants in China. The proposed locations for these plants were Shanghai, Tianjin and
Qingdao. Also in 1984, Coke signed proposals to build a wholly owned concentrate plant in
Shanghai, and to build a bottling plant as a joint venture close to the proposed concentrate plant.
The agreement stated that Coke would be the sole owner of the concentrate plant and the
Ministry of Light Industry and the Shanghai Investment and Trust Corporation (SITCO)9 would

8
In order to promote economic growth and foreign direct investment, the Chinese government began
setting up Special Economic Zones (SEZs) in 1980. China has established SEZs in Shenzhen, Zhuhai and
Shantou in Guangdong Province and Xiamen in Fujian Province, and the entire province of Hainan. A SEZ
is a geographical region that has economic laws that are different from the country's economic laws. A SEZ
has special economic systems and policies which are designed to promote foreign investment and
economic growth in that particular region. SEZs usually have special tax incentives for foreign investments
and greater independence regarding international trade activities.
9
SITCO was established in July 1981, with the Shanghai Municipal Government as the major shareholder.
It is an investment and finance company with a presence in real estate, international trading, tendering and
consulting. In January 1993, SITCO was renamed Shanghai International Trust & Investment Corporation

4
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own the bottling plant.

Finally, in 1985 the Chinese government gave Coke its approval to sell its products to the
Chinese. However, construction work for both plants would not begin until 1986 when President
Jiang Zemin gave his approval. Also in 1986, Coke sponsored and organized the first Asian
Coca-Cola Cup football tournament in China. In 1988, construction of the Shanghai concentrate
plant was completed and it began production. The opening of the concentrate plant marked the
localization of the inputs of Coke's production process, as it began producing the concentrate
locally using local inputs. The bottling plant in Tianjin was also completed in 1988 and produced
local Chinese brands of soft drinks in addition to Coke's products. Production of local Chinese
brands was another feature of Coke's localization strategy.

By 1993 Coke had set up a total of 14 bottling plants in China, and had obtained permission from
the Ministry of Light Industry and the State Economic and Trade Commission to build 10 more
plants. However, the approval to build bottling plants came with certain stipulations. The
provinces in which the bottling plants were to be built were specified by the Chinese government,
and in addition the plants had to be located in the capital cities of these provinces. Another
stipulation was that Coke should, in addition to Coke's brands, produce local Chinese beverages
at these new plants.

Since Coke already had 14 plants and had permission to open 10 more it decided to restructure its
bottling operations to form bottling alliances. In 1993, it formed alliances with two Hong Kong-
based multinational companies Swire Pacific (Swire)10 and Kerry Beverages Group (Kerry)11.
These two firms became its key partners in China. Coke signed an agreement with Swire to
produce and distribute its products in southern China and certain interior provinces. Coke also
acquired a 12.5 percent stake in Swire. By the year 2000, Coke and Swire became partners in
nine joint ventures in China. Also in 1993, Coke bought 12.5 percent stake in Kerry Bottling
Company which was part of the Kerry Beverages Group. Kerry Bottling focused on bottling
operations in northern and interior China, and partnered with Coke for ten joint ventures.

In 1995, Coke set up separate production lines for its own products and for the local Chinese
brands produced at the Tianjin plant. The existing facility in Tianjin became the Tianjin Jin Mei
Beverage Company which produced the beverage base for all domestic brands and also provided
training to professionals in the Chinese soft drink industry. In the same year, the Tianjin Coca-
Cola Bottling Company was built in the Tianjin Economic and Technological Development Zone
to produce Coke’s brands.

When Coke realized that many Chinese consumers preferred non-carbonated beverages with
Chinese flavours, it decided to enter the domestic non-carbonated beverages market. In 1996,
Coke launched the ‘Tian Yu Di’12 a non-carbonated beverage brand which was the first domestic
non-carbonated beverage brand to be produced by a multinational company. Under this brand,
the Tianjin Jin Mei Beverage Company produced fruit juices like mango and lychee (a popular
Chinese dessert fruit), ready-to-drink teas in oolong and jasmine flavors, and bottled water. Also
in 1996 Coke sponsored the Asian Games in China. In 1997, it also started producing carbonated

(SITICO).
10
Swire Pacific is a Hong Kong based company which was established in the 1960s. It is also a partner in
Coca-Cola's bottling operations in Taiwan and the United states.
11
A privately owned Hong Kong based group. Robert Kouk a Malaysian Chinese, owns a major share in
the company.
12
The brand name ‘Tian Yu Di’ translates as ‘Heaven and Earth’ in English.

5
 304-629-1

beverages under the brand name ‘Xingmu’.13 Once again in an effort to cater to the tastes of the
Chinese consumers, this line of domestic beverages came in fruit flavors such as green apple,
watermelon, coconut, peach and orange. The flavors were a huge hit and soon the brand's sales
had surpassed those of Tian Yu Di. Over the years Coke opened several bottling facilities and by
1999, it had 28 bottling plants and 2 concentrate plants; one for Coke’s brands and one for the
local brands.

Localizing the Coca-Cola System

The central part of the Coca-Cola system comprised of the concentrate plants and bottling
enterprises which produced the final product. But many inputs and services went into producing
the final product and it also took a good distribution network to get the product to the consumer.
Therefore, the network of suppliers of inputs and services and the distribution network were
extensions of the Coca-Cola system.

When Coke re-entered China, it formed local partnerships to open several bottling plants. These
bottling plants were owned by bottling enterprises that operated as joint ventures (Refer Exhibit
I). Typically the joint venture consisted of Coke, one of its key bottlers (either Swire or Kerry)
and either a state-owned enterprise or a local Chinese company (based in the city where the joint
venture was located), or both the state enterprise and the private local firm. In some cities the
bottling enterprise ran more than one bottling plant. Coke also had independent bottling
enterprises where its key bottlers were not involved. These bottlers operated under a franchise
arrangement with Coke and were allowed to use its trademark. The local bottlers needed to invest
in the land, building, machinery, trucks, crates and bottles.

Localization of the Coca-Cola system was not limited to the bottlers and production of the
beverages. It extended to the inputs that went into making the final product and the distribution of
the product.

The bottling enterprises depended upon local suppliers for various inputs and services and each
of these enterprises handled its own procurement of inputs based upon its production schedule.
Since bottlers ordered supplies according to their immediate requirements, they chose suppliers
on the basis of how efficiently they could deliver supplies on demand. Bottlers only accepted
inputs that met Coke's global standards. Initially, Coke could not find suppliers that met its
standards so it had to import certain inputs. For example, in the early 1980s it had to import PET
bottles. However, in 1986, Coke began procuring PET bottles from the Zhong Fu Industrial
Group (Zhong Fu).14 Zhong Fu began manufacturing PET bottles in 1986, after it received
technical advice and training from Coke. Zhong Fu went on to become one of China’s biggest
suppliers of PET bottles to Coke, and also to other beverage companies.

Unlike the bottling enterprises, Coke had no share of ownership in the companies that supplied
the inputs for production. The bottling enterprises developed good relationships with their local
suppliers as they were usually among the suppliers' biggest customers. 98 percent of the final
product consisted of local inputs such as water, sugar, PET bottles, glass, paper, closures, crowns
and other packaging material. The bottlers relied upon Chinese companies for bottling line
machinery, trucks, and lifting machinery as well. Coke also engaged local firms for business
services such as legal services, financial services, repair services, accounting services,
advertising, design, travel, construction, etc. The services of local construction companies were

13
The brand name ‘Xingmu’ translates as 'Smart' in English.
14
The Zhong Fu Industrial Group was founded by Huang Le Fu who started out with a small plastics
company in 1971. Then in the 1980s, he started manufacturing fiber material for the garment industry.

6
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hired when building new plants or for expansion of existing plants.

During the 1980s, demand for Coke's products far exceeded the supply. However, it had
difficulty distributing its products beyond the major cities and towns due to lack of proper
infrastructure such as roads and railways, at that time. In most other countries, Coke's main
method of distribution was the 'direct store delivery'. It ran its own sales centers, trucks, and
employed sales and delivery staff to sell and deliver soft drinks directly to retail outlets and
restaurants. But this method of distribution was effective only in developed markets and
economies. To overcome the challenges of covering a large geographical area and lack of good
infrastructure, Coke had to develop a different kind of distribution network in China. Coke based
its distribution network on where the demand was and where the consumers could actually buy a
Coke product. Since a method that would work for one geographical area might not work for
another, Coke had to customize its methods of distribution for each market. It used both
wholesalers and the direct store delivery system to distribute products in China.

The Coke bottlers owned and operated direct store delivery systems, but it was not the primary
method of distribution. This system accounted for only about 20 percent of its sales while
wholesalers accounted for the rest. The bottlers had warehouses, sales centers, fleets of trucks,
sales personnel and other staff to manage sales and delivery to retail customers as well as
wholesale customers. Depending upon the size of the city and market as well as its proximity to a
bottling plant, the bottler would have either a warehouse or a sales center or sometimes both. In a
large city the bottler had a big warehouse from which it would transport products to its smaller
warehouses in other locations and to retailers. In smaller cities the bottlers ran sales centers as
well as warehouses. Salesmen from these sales centers visited customers every day to take
orders; the turnaround time (the time between placement of an order by the customer and
delivery of product) for an order was usually 24 hours. In some cities bottlers ran the sales center
at the bottling plant itself instead of at a different location. However, the bottler-owned direct
store delivery system was not enough to reach all retail outlets such as restaurants, small stores
and vendors.

As mentioned earlier, in addition to selling directly to retail outlets, the bottlers also sold the
products to the wholesalers who in turn distributed them to the retail outlets. Therefore, Coke was
dependent on the local Chinese distributors to get its products to the final consumer. For various
reasons this proved to be an effective method of distribution. Firstly, Coke did not need to invest
a large amount of capital in the distribution network. Secondly, the local Chinese companies had
more expertise in wholesaling in the area that they were located in, as they were more familiar
with the area as well as the requirements of the retailers. Over the years, Coke has developed
strong relationships with different kinds of wholesalers in China. During the 1980s, most of
Coke's distributors were state-owned enterprises as most of the wholesale sector was state-
owned. Later in the 1990s, many state-owned distribution companies were privatized and
individual private entrepreneurs were also encouraged to set up their own wholesale companies.
So, more and more local Chinese private wholesale companies began to distribute Coke products.

Marketing and Advertising Strategies

Back in 1927, when Coke first entered China, it faced the challenge of communicating with the
Chinese. The company needed to transliterate 'Coca-Cola' into Chinese characters if it wanted to
reach the millions of Chinese consumers. However, finding the nearest phonetic equivalent to
Coca-Cola proved to be a difficult task. Not only did the transliteration need to sound like Coca-
Cola but it also needed to have an appropriate meaning. Some shopkeepers who made their own
transliterations and put up signs, proved how disastrous it could be if the meaning of the
characters is not considered. Some of them put up signs that had ridiculous meanings such as
“female horse fastened with wax” and “bite the wax tadpole”. The Chinese language was made
up of thousands of characters and out of these only 200 would even remotely sound like Coca-
Cola. Also, most of the characters had more than one meaning. After extensive research the

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company finalized K'o K'ou K'o Le^ (the aspirates designated by ' are necessary to approximate
the English sounds) in Mandarin, a dialect understood by most Chinese. K'o means to permit, be
able, may, can, K'ou means mouth, hole, pass, harbor and Le^ means joy, to rejoice, to laugh, to
be happy. So, K'o K'ou K'o Le^ could be interpreted as ‘to permit mouth to be able to rejoice’ or
‘something palatable from which one derives pleasure’.

Coke believed that it needed to use music, color, arts and sports that the Chinese could identify
with in order to connect with them. It gave its local managers autonomy over advertising and
promotions. During the 1996 Chinese New Year, it aired a television commercial using a Chinese
dragon, something all Chinese would recognize. In the commercial, the dragon was decorated
with red coke cans from head to tail and danced in a parade. Towards the end of the commercial a
voice said, “For many centuries, the color red has been the color for good luck and prosperity.
Who are we to argue with ancient wisdom?” In July 2001, when China announced that it would
host the 2008 Olympics, Coke immediately introduced a commemorative gold Coke can in the
market.

Recognizing the Chinese people's love for soccer, Coke designed some of its marketing and
promotions around the FIFA World Cup. In January 2001, Coke became the official beverage
and a main sponsor of the national Chinese soccer team. It also commissioned a special song
sung by eight popular Chinese singers during a live telecast of the Chinese team's first match.
The song became popularly known as the ‘Team China Anthem’. From the time the Chinese
team started playing the qualifying matches, Coke aired different TV commercials and organized
other promotions based on the World Cup. In August 2001, during the World Cup Asian
Qualifying Matches, Coke launched “The Dream Never Dies,” an advertisement that showed the
Chinese soccer fans' enormous support for their national team. Then in October 2001, marking
the occasion of the Chinese team qualifying for the finals, Coke introduced a commemorative can
and video disc called “The Road to the World Cup”.

Later in early 2002, Coke organized a road show called “Hero Tours” so that soccer fans all over
China could meet with the team. It also ran special customized local promotions such as special
packaging, World Cup star cards, ticket give-aways, flag bearer selections, and ‘Finger Soccer’15
tournaments for school kids. In May 2002, Coke aired another advertisement about the Chinese
team and the soccer fans' support to the team. The advertisement which was called “Home
Ground Advantage” showed a Chinese boy giving the players a Coke bottle filled with soil to
wish them ‘home ground advantage’ in the World Cup.

Coke also used SMS to run promotions and increase interaction between the company and its
consumers. This was an effective method to use in China because, according to Teleconomy, a
London-based market research company, China had 176 million mobile phone users in 2002. In
2002, during the end of summer, Coke ran a SMS contest for 35 days. The contest, which was
called Coke Cool Summer, was announced through a television advertisement. Whoever guessed
the correct highest daily temperature in Beijing and sent the reply through SMS, won a year's
supply of Coke or Siemens cell phones. According to Coke, it received over 4 million messages
during the contest. “We are thrilled with the results, which frankly exceeded expectations,
consumers can look forward to Coke adding more fizz on this platform, which is now clearly a
key part of our consumers' lifestyle”, said Sumanta Dutta, Coca-Cola China's Brand director.16 In
early 2004, Coke introduced ‘Modern Tea Workshop’ a new line of tea drinks. To promote this
new line of tea drinks, it hired Hong Kong movie stars, Tony Leung and Shu Qi. It also hired
15
“Finger Soccer” is a very popular game in Latin America and has been brought to China by Coca-Cola.
The soccer match is then played using fingers instead of feet, with two members in each team. The game
kit consists of a pair of miniature replica soccer boots which are slipped onto two fingers of one hand.
16
Brian Morrissey, “Coke Judges China SMS Campaign a Success,” October 30, 2002,
www.boston.internet.com

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Taiwanese pop-stars S.H.E. and Will Pan to promote Coca-Cola.

CHINA, COCA-COLA'S SECOND LARGEST MARKET IN ASIA

Coke has enjoyed great success in China and in the Asian markets on the whole. According to the
2003 Annual report, Coke's Asian operating segments boosted its revenues when growth in its
US market was slowing down. In terms of volume, China was Coke's second largest market in
Asia in 2003 (Refer Exhibit II) and Coke estimated that China would beat Japan to the top
position in 2004. Encouraged by its success in big cities and towns, Coke wanted to reach more
customers in rural areas. “We'd grown well by reaching the top 100 cities, but how many people
were we reaching? Rather than continuing to focus solely on those highly competitive urban
areas, Coke must push aggressively into the rest of China and India”, said Patrick Siewert, Coke's
East and South Asia group president.17 In early 2004, Coke announced plans to build two new
bottling plants in China's western provinces to tap the market potential of China's rural areas.
Kerry signed an agreement with Chongqing Economic and Technological Development Zone to
build a $11 million bottling plant in Chongqing, Western China. COFCO Coca-Cola, a Coke
bottling enterprise announced plans to build a bottling plant in Lanzhou, the capital city of Gansu
Province in Northwest China. COFCO Coca-Cola also announced plans to build two new plants
in Guangdong province in Southern China. These plants would be built in Zhanjiang and
Huizhou. The construction of the Zhanjiang plant began in mid-2004 and construction of the
Huizhou plant began in September 2004.

17
“Coke's big gamble in Asia: Digging deeper in China, India” by Leslie Chang in Kunyang, China, and
Chad Terhune and Bets McKay in Atlanta, The Wall Street Journal, Gabriel Kahn in Hong Kong and Eric
Bellman in India, contributed to this article, August 11, 2004, www.mlive.com

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EXHIBIT I

COCA-COLA CHINA LTD.'S LIST OF BOTTLING ENTERPRISES (AS OF

MARCH 2000)
Name Year Opened City/Province Key Shareholders
Name City/Province Key Shareholders Key/Anchor Bottler
Beijing Coca-Cola Beijing Kerry Beverages Kerry
Beverage Co. Ltd. National COFCO
Beijing COFCO
Swire Guangdong Coca- Guangdong Swire Coca-Cola HK Ltd. Swire
cola Ltd. Guangdong Foodstuffs
Imp & Export
(Group) Corporation
COFCO Industries
Development Co.
Guangmei Foods Co. Guangdong BFC International (Asia) Swire
Ltd. (for Xingmu & Meijin) Ltd.
Guangzhou Eagle Coin
Enterprise Group
Corporation
Swire Coca-Cola Xiamen, Fujian Swire Beverages Swire
Beverages Xiamen Xiamen Luquan Industrial
Ltd. Co. Ltd.
Zhuhai Coca-Cola Zhuhai, Guangdong Macau Industrial Limitada Independent
Beverage Co. Ltd. Zhuhai Food & Beverage
Co. Ltd.
Nanning Coca-Cola Nanning, Guangxi Kerry Bottlers (Nanning) Kerry
Beverage Co. Ltd. Co. Ltd.
Nanning Kangle
Shareholding Co. Ltd.
Dalian Coca-Cola Dalian, Liaoning Kerry Beverages Kerry
Beverage Co. Ltd. Dalian Fruits Co.
Shanghai Shen-Mei Shanghai Coca-Cola China Ltd. Independent
Beverage & Foods National COFCO
Co. Ltd. Shanghai SITICO &
Shanghai Food Industrial
Investment
Nanjing BC Foods Nanjing, Jiangsu BCD Swire
Co. Ltd. National COFCO
Nanjing Perfumery
Factories
Hangzhou BC Foods Hangzhou, Zhejiang BC Development Co. Ltd. Swire
Co. Ltd. National COFCO
Hangzhou Tea Factory
Tianjin Jin Mei Beverage Tianjin, Hebei Coca-Cola (Asia) Independent
Co. Ltd. Holdings Ltd.
Tianjin Beverage Factory
China National Food
Industry Corporation
China Light Industrial
Corp for Foreign
Economic & Technical
Cooperation
Hainan Coca -Cola Hainan Coca-Cola China Ltd. Independent
Beverage Co. Ltd. National COFCO
Hainan COFCO
Tianjin Coca-Cola Tianjin, Hebei Coca-Cola (Asia) Independent
Bottling Co. Ltd. Holdings
Tianjin Beverages Factory
China National Food
Industry Corporation
Xian BC Hans Foods Xian, Shaanxi BCD Swire
Co. Ltd. Xian Hans Brewery

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Name City/Province Key Shareholders Key/Anchor Bottler

Wuhan Coca-Cola Wuhan, Hubei Kerry Beverage Kerry
Beverage Co. Ltd. National COFCO
Wuhan Second Beverage
Factory
Shenyang Coca-Cola Shenyang, Liaoning Kerry Beverages Kerry
Beverage Co. Ltd. Ba Wangshi Beverage
Beijing COFCO
Harbin Coca-Cola Harbin, Heilongjiang Kerry Beverages Kerry
Beverage Co. Ltd. Harbin Economic &
Technology Area
Industrial Development
Co. Ltd.
Beijing COFCO
Swire Coca-Cola Zhengzhou, Henan BCD, Beijing Swire
Beverages Beijing Zhong Yin
Zhengzhou Ltd. Industrial & Trading
Co.
Zhengzhou General Food
Products Factory
Qingdao Coca-Cola Qingdao, Shandong Kerry Beverages Kerry
Beverage Co. Ltd. Qingdao Yiqing Industrial
Corp.
Swire Coca-Cola Hefei, Anhui BCD Swire
Beverages Hefei CITIC
Ltd. Anhui Jiushi Group
Swire Beverages Dongguan, Guangdong Swire Coca-Cola HK Ltd. Swire
(Dongguan) Ltd. Dongguan Huaxin
Industrial Co.
Taiyuan Coca-Cola Taiyuan, Shanxi Kerry Beverages Kerry
Beverage Co. Ltd. National COFCO
Xishan Coal & Electricity
(Group) Co.
Ltd.
Chengdu Coca-Cola Chengdu, Sichuan Kerry Beverages Kerry
Beverage Co. Ltd. Chengdu Hua Jin Group
Kunming Coca-Cola Kunming, Yunnan Kerry Beverages Kerry
Beverage Co. Ltd. COFCO
Hong Kong Yuan Tong
Investment Co.
Ltd.
Key/Anchor
Source: www.moore.sc.edu.

11
 304-629-1

EXHIBIT II

PERCENTAGE-WISE BREAKUP OF TOTAL UNIT CASE VOLUME IN ASIA

OPERATING SEGMENT

Source: 2003 Annual Report Summary, www.coca-cola.com.

12