Coca-Cola closes the company and transfers the My Family brand to another subsidiary

Coca-Cola will close the juice manufacturer Nidan Juices LLC on June 1 and transfer its rights to the My Family brand to its other Russian company, Multon. As a result, the Novosibirsk Nidan Juices plant with a capacity of 180 million liters of products per year will also cease to exist. The Russian division of Coca-Cola explained this step by the need to optimize production and distribution due to significant changes in the juice market.

After the closure of its Novosibirsk Nidan Juices plant, Coca-Cola will transfer the My Family brand to its other Russian company, Multon.
Photo: Evgeny Dudin, Kommersant

Yesterday, Kommersant learned that the Coca-Cola company decided to close its subsidiary Nidan Juices LLC (Moscow region). As reported by the Russian representative office of Coca-Cola, on April 4, a licensing agreement was signed under which Nidan Juices transfers the rights to produce and sell products with the My Family trademark to another subsidiary, Multon. This means the end of Nidan Soki's production activities and the dismissal of its employees.

“This step is due to the fact that the Russian juice market has undergone significant changes in recent years. To achieve the best results, it is necessary to follow modern market rules and make decisions about business consolidation and integration. The result of a careful study of the market situation was the decision of the Coca-Cola system in Russia to optimize the portfolio of juice brands, infrastructure and distribution system,” Coca-Cola explained to Kommersant. The holding expressed regret that “the necessary steps to strengthen the position of the Coca-Cola system in the Russian juice market affected the company’s highly qualified employees” and promised to carry out all necessary dismissal procedures in full compliance with Russian labor legislation.

The Nidan company (brands “My Family”, “Yes!”, Caprice) became part of Coca-Cola in 2010. Then Nidan controlled about 18% of the Russian market, managing the Nidan-Gross factories in Kotelniki, Moscow region (580 million liters per year) and Nidan-Ecofruit in Novosibirsk (180 million liters). Later, these factories were reorganized into branches of Nidan Juices LLC. The Coca-Cola Company, together with its Greek bottler Coca-Cola Hellenic, bought the Multon company (Dobry and Rich brands), the second largest Russian juice producer, in 2005. Currently, Multon operates plants in Shchelkovo (Moscow region) and St. Petersburg with a total capacity of over 790 million liters per year. According to Coca-Cola, the purchases of Multon, Nidan, as well as the manufacturer of innovative drinks Aqua Vision in 2007 cost the holding $1 billion.

Acting Vice-Governor of the Novosibirsk Region Sergei Semka told Kommersant yesterday that Nidan Juices has already notified the regional Ministry of Labor, Employment and Human Resources about the upcoming layoffs at the Novosibirsk plant. According to Coca-Cola, it has about 400 employees. “All local retail chains have received letters about the closure of Nidan,” the Holiday company told Kommersant yesterday. This information was confirmed by the head of external communications of the Russian representative office of the French retail chain Auchan, Maria Kurnosova. “We were informed about this, but there has not yet been a proposal to renew the supply agreement with any other Coca-Cola company,” she noted.

Finam Management analyst Maxim Klyagin suggested that the decision to optimize production capacity was made by Coca-Cola as part of a global program to reduce costs and increase profitability. “The corporation’s business margins have been declining recently, including against the backdrop of increased competition in key markets and in key segments and a downturn in the global economy, which became the reason for production cuts in a number of European countries. It is quite logical that the trend has also affected the Russian market,” the analyst believes. He estimated the juice market capacity of the Siberian Federal District at 350-400 million liters. “Apparently, part of the production capacity, despite the existing growth potential, is redundant,” suggested Mr. Klyagin.

Coca-Cola reported that Nidan Juices will cease production on June 1, without ruling out the possibility of a future sale of the assets of the subsidiary, including the Novosibirsk enterprise.

Yuri Belov, Valery Lavsky, Novosibirsk

All the juice has been squeezed out of Nidan