If the talks between Coca-Cola and the Croatian businessman Ivica Todoric about the takeover of the Jamnica water factory are successful, Coca-Cola will have a 60% share in the Croatian and a 20% share in the Serbian bottled water market.
Coca-Cola came to Serbia in 2005 following a 100% acquisition of Vlasnika water company which produces the famous bottled water brand Rosa. Last year, Rosa had a 15.7% share in the Serbian market.
Up until Todoric started having serious financial difficulties, the Croatian mineral water and non-alcoholic beverage market was an impregnable fortress to conquer for Coca-Cola. In East Europe, Coca-Cola is the absolute leader, but, as it seems, there are some market players that fair even better than this corporate giant. Todoric’s beverage company Jamnica was one of them. Coca-Cola acquiring Jamnica is an expensive deal since Jamnica’s stock exchange value is in the region of 500 million EUR.
How much did Todoric pay to enter Serbian market?
In 2008, Todoric bought a 70% share in the agricultural company Nova Sloga, which was the owner of the water company Mivela. He paid 4 million EUR for the share, and undertook to invest further 11 million EUR. Miroslav Miskovic also wanted to acquire Mivela but failed because he offered less – 3.3 million EUR – for the company.
If Coca-Cola’s deal with Todoric is successful, the American company will also become an exclusive bearer of the rights to use mineral water from the spring near Trstenik. Mivela currently has 80 employees and its revenue in 2015 amounted to 2 billion dinars while the net profit stood at 26 million dinars. Stock brokers claim that Mivela is a fast growing company which market could reach 10 million EUR.
Foreign companies own 50% of the Serbian mineral water market. ¼ of the market belongs to Knjaz Milos which is owned by the investment fund Mid Europa Partners. The Minaqua Company, which market share currently stands at 17.5%, is completely owned by a company registered at the British Virgin Islands called Global Water Investment Group which proprietors are the Bogicevic family from Novi Sad. In 2015, Minaqua generated 2 billion dinars in profit. However their profit was much bigger than Mivela’s and it amounted to 380 million dinars. The company’s worth is estimated at around 40 million EUR.
The Ekstra-Pet Company owns just oaver 50% of Voda Vrnjci, while the majority share in Heba from Bujanovac was sold to Nektar in 2008. Prolom is the only water company in Serbia that has been bought by its workers. Jazak is owned by Petroleum Industry of Serbia (NIS).
Director of the Serbian Association of Mineral Water Companies, Branka Serovic says that the Concession Law is still not applied in the mineral water sector. According to this law, the state authorities are allowed to conclude individual 20- to 30-year-contracts with mineral water producers just like in the EU. For now, the water companies in Serbia are granted only exploitation rights that are valid for 5 years.
According to economy expert Neda Vidovic, the state is losing 70 million EUR annually because it is not adhering to the Concession Law in the mineral water sector.
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