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Good News! Coca-Cola Supplies Unaffected In Australia, Other Countries Not So Lucky

Australia will be spared from a shortage of Coca-Cola despite the supply of a number of popular varieties of the soft drink in other countries under threat by the ongoing spread of coronavirus.

Coca-Cola products in the U.S could soon be in short supply because the company sources ingredients from China.

But in good news for Aussies, Coca-Cola confirmed to 10 daily production will be unaffected in Australia.

“We are confident in our supply chain as we have limited sourcing from China and there will not be any impact on Australian consumers," a spokesperson said.

“As matter of routine, we maintain business continuity plans throughout the world including maintaining alternative procurement sources in other regions of the world.”

In its annual report released this week, The Coca-Cola Company said its suppliers in China had been experiencing delays in the production and export of artificial sweeteners that are used in its diet and zero-sugar drinks.

The company said while it had initiated contingency plans to prevent any short-term impacts on supply, it warned there could be a longer-term impact if production or export operations in China continue to deteriorate.

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"Beginning in January 2020, concerns related to the spread of the novel coronavirus COVID-19 have caused a disruption to our business, primarily in China," it said in the report.

"While we currently expect this business disruption to be temporary, there is uncertainty around its duration and its broader impact, and therefore the effects it will have on our business."

Coca-Cola believes the disruption to its supply chain will negatively impact unit case volume and financial results for at least the first quarter of 2020.

The company has not revealed the exact non-nutritive sweeteners that have had their supply impacted due to the virus, but said it primarily uses aspartame, acesulfame potassium, sucralose, saccharin, cyclamate and steviol glycosides in its products.

Image: Getty

"Generally, these raw materials are readily available from numerous sources," the report said.

"We purchase sucralose, which we consider a critical raw material, from suppliers in the United States and China."

Other major global companies including Apple, McDonald's and Starbucks have also had their business impacted, with the closures of dozens of stores in China as well as the forced reduction of staff and service as a result.

It comes as fears of the virus' threat to stock markets across the globe and particularly in Asia, continue to intensify.

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Australia has weathered economic storms before, but the extent of the effects of coronavirus on some sectors of our economy could be “severe and long-lasting”.

On Wednesday, the S&P 500 and the Dow Jones Industrial Average both shed more than three percent on Tuesday in their fourth straight session of losses.

That led MSCI's broadest index of Asia-Pacific shares outside Japan down 0.6 percent on Wednesday. Australian shares were down 1.77 percent, while Japan's Nikkei stock index slid 3.3 percent.

Yields on 10-year and 30-year US Treasuries teetered near record lows as worries about the economic impact of the virus outbreak boosted safe-haven assets.

Oil prices recovered some recent losses in Asia, but there are lingering concerns that expected output cuts by major oil producers will not be enough to offset a decline in global energy demand caused by the virus.

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Drop In Chinese Coronavirus Cases, But Concern For Rising Global Spread

China has reported a sharp decrease in new deaths and cases of the coronavirus, but a doubling of infections in South Korea and 10 new cases in Iran added to unease about its rapid spread and global reach.

The World Health Organisation says the epidemic has peaked in China, but concern that its spread is accelerating in other countries is likely to keep investors on edge.

"What we are seeing is share markets are playing catch up," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

"Other asset markets have been flashing warning signs for weeks. A corrective bounce in equities is possible, but we still have a lot of downward momentum."

The virus has claimed almost 3000 lives in mainland China but has spread to dozens of other countries. Of increasing concern to investors, however, is the rising death toll in other countries.

Drastic travel restrictions slammed the brakes on China's manufacturing and consumer spending, and there are worries other countries will face similar disruptions.

With AAP.