Shares in Coca Cola HBC edged down this morning amid warnings from analysts that the bottler of the iconic fizzy drink could be the latest to feel the financial pain of boycotts linked to the Israel’s Gaza war.
Today’s forecast comes just one day after fast-food chain McDonald’s missed key sales targets due to customers steering clear of its restaurants because of their perceived support of Israel.
This comes after Hamas, which is designated as a terror group by the UK, launched an attack on Israel on October 7.
Israel’s response in Gaza has led to at least 25,000 being killed, including many children, while hundreds of Israeli hostages are still in captivity. Recently, Israel was taken to the International Court of Justice, accused of genocide.
On Monday, the American chain said global sales across its stores grew 3.4 per cent in the fourth quarter below analyst expectations of 4.7 per cent. While revenue reached $6.41bn (£5.11bn) down 0.7 per cent from estimates of $6.45bn (£5.41bn).
It further solidified the impact boycotts are having on high street favourites after chief Chris Kempczinski said the move had “meaningful business impact”.
In a LinkedIn post last month, the US boss said the giant was “continuing to stand in solidarity with communities around the world”.
“McDonald’s trends are often a good indicator for Coke’s global volume growth,” analysts at Jefferies said.
“We believe that there is likely to be some modest impact towards the end of the fourth quarter from the Middle East conflict with risk of boycotting of western brands, ” they said.
Ahead of the FTSE 100 firm’s trading update next week, analysts agreed that volumes would trade slightly below the market consensus of 1.2 per cent and instead come in 1.0 per cent.
They also predict that for 2024 EBIT growth will come in at 8.7 per cent compared to a consensus reading of 10.9 per cent. However, Jefferies said it believes the business is in a better position to “absorb volatility”.
In October, the bottler announced “strong organic growth” as part of its third-quarter trading update today, with organic revenue being up 15.3 per cent.
Despite criticism and push back from protestors shares in the firm are trading 17 per cent higher than they were a year ago.
Chief Zoran Bogdanović has been quietly trying to rebuild the brand’s reputation after questions were raised about the extent of Coca Cola HBC’s operations in Russia after it pledged it would withdraw from the country following the war. A claim the company disputes.
McDonald’s and Coca-Cola are not the only global brands to be criticised amid the conflict in the Middle-East.
Last week coffee chain Starbucks cut its annual sales forecast due to boycotts impacting sales.
The world’s biggest coffee chain was also forced to call for peace late last year after its stores were vandalised.
Boss Laxman Narasimhan, said: “We see protestors influenced by misrepresentation on social media of what we stand for.”
“We have worked with local authorities to ensure our partners and customers are safe. Nothing is more important. Our stance is clear. We stand for humanity.”
Some $11bn (£10bn) has been wiped off the coffee outfit’s market value amid calls for a boycott.