Coca-Cola Enterprises Inc.
NEWS RELEASE
CONTACT: Laura Asman - Media Relations
(770) 989-3023
Margaret Carton - Institutional-Investor Relations
(770) 989-3622
Helene Krupp - Share-Owners Relations
(770) 989-3620
FOR IMMEDIATE RELEASE
COCA-COLA ENTERPRISES INC. CONFIRMS
GOVERNMENT APPROVAL TO REINTRODUCE PRODUCTS
IN BELGIUM AND FRANCE
ATLANTA, June 24, 1999 - Coca-Cola Enterprises confirmed today
that the Minister of Health in Belgium has approved the reintroduction
of all Belgian produced Coca-Cola products into the Belgian marketplace. As a result
of the Belgian action, the Company also expects to reintroduce products from its
Belgian plants into Luxembourg and the Netherlands in the near future. In addition,
the Ministry of Economics in France has approved the resumption of the sale in France of
canned products produced in Dunkirk.
As we reintroduce our products into the marketplace, the most important issues to
Coca-Cola Enterprises are the quality of our products and earning the trust and
confidence of our consumers and customers," commented Henry A. Schimberg,
president and chief executive officer of Coca-Cola Enterprises Inc. "We apologize
to our consumers and customers for all distress and inconvenience this situation has
caused, and we assure our consumers, our customers, and all European officials that
we have resolved these product quality issues."
The Company anticipates that approximately 14 million unit cases of product were
impacted by the product recall, representing substantially less than 1 percent
of the Company’s annual volume. The Company currently estimates that the nonrecurring
costs associated with the product recall will be approximately $60 million in the second
quarter of 1999. Some of the costs will be reimbursed by insurance and other third
parties, but the exact amount is currently unknown.
In addition to the nonrecurring costs of the recall, there will be a negative impact
on sales, cash operating profit, and earnings per share in the second quarter of 1999
in the affected countries. The extent of the loss of sales and profits in the second quarter
of 1999 is difficult to determine until the Company can assess the effect of product
reintroduction campaigns in Europe. Coca-Cola Enterprises is working closely with
The Coca-Cola Company to implement marketing plans to mitigate the impact on
full-year 1999.
Mr. Schimberg stated, "We believe that we can minimize the short-term impact on
sales and we are confident that this situation will not materially affect financial
results in the year 2000 and beyond."
Forward-Looking Statements
Included in this news release are several forward-looking management comments
and other statements that reflect management’s current outlook for future periods.
As always, these expectations are based on the currently available competitive,
financial, and economic data along with the Company’s operating plans, and is
subject to future events and uncertainties. Among the events or uncertainties which
could adversely affect future periods are any long-term impact on European sales
related to the second-quarter 1999 product quality issues, lower-than-expected net
pricing resulting from increased marketplace competition, an inability to meet performance
requirements for expected levels of marketing support payments from The Coca-Cola Company,
material changes from expectations in the cost of raw materials and ingredients,
an inability to achieve the expected timing for returns on cold drink equipment and
employee infrastructure expenditures, an inability to meet projections for
performance in newly acquired territories, unexpected costs associated
with Year 2000 compliance or the business risk associated with Year 2000 noncompliance
by customers and/or suppliers, unexpected costs associated with conversion to
the common European currency (the Euro), and unfavorable interest rate and currency
fluctuations. The forward-looking statements in this news release should be
read in conjunction with the detailed cautionary statements found on
page 19 of the Company’s 1998 Annual Report and in the Company’s first-quarter 1999
Form 10Q
Coca-Cola Enterprises Inc. (NYSE: CCE) is the world's largest marketer, distributor,
and producer of bottle and can liquid nonalcoholic refreshment. Coca-Cola
Enterprises sells approximately 74 percent of The Coca-Cola Company's bottle and
can volume in North America and is the sole licensed bottler for products of
The Coca-Cola Company in Belgium, Great Britain, Luxembourg, the Netherlands, and most of
France.
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