Coronavirus cuts into Coca-Cola Production

Coca-Cola said that it is taking precautionary measures with its China-based employees to reduce the threat of infections.

Rick Docksai | Mar 12, 2020

The coronavirus outbreak may cause supplies of Coke to dip, Coca-Cola said in an report it released this week. The company said that virus-related disruptions to its supply lines in China threaten to cause shortages of certain key ingredients, resulting in an estimated cut of 2-3 percentage points to its case volume and a 1- or 2-cent reduction to its first-quarter earnings-per-share.

"We have initiated contingency supply plans," the report states. It added that while these backup plans may prevent production cuts in the short term, "We may see tighter supplies of some of these ingredients in the longer term should production or export operations in China deteriorate."

Sweeteners that are at risk of production shortages include aspartame, acesulfame potassium, sucralose, saccharin, cyclamate, and steviol glycosides. These are used in a variety of diet and non-diet Coke beverages.

Mainland China has reported 78,500 incidents of coronavirus as of Thursday, with 2,641 deaths in the Hubei province where the virus first emerged. Infections continue throughout China and worldwide, with nearly 2,800 dead across the globe so farincluding 44 new deaths in China as of Fridayand fears of contracting the virus have caused widespread reductions in manufacturing and economic productivity within China, including at the facilities where Coca-Cola's sweeteners are produced.

Coca-Cola said that it is taking precautionary measures with its China-based employees to reduce the threat of infections. The company said that it plans to distribute face masks, hand sanitizers, and health-monitoring systems throughout its Chinese factories.

The company released a statement expressing "deepest sympathies" for those who have been affected by the virus, and said that it is also "donating to organizations that are working diligently to support patients and contain the virus."