Coca-Cola reported that the outbreak of coronavirus in China could affect its supply chain demands, leading to a shorter supply of goods that go into making the company’s diet beverages.
Exports of goods from China, such as artificial sweeteners used in the company’s zero-sugar drinks, have been delayed as a result of industrial stalls related to the spread of the virus, according to CNN on Tuesday.
“We have initiated contingency supply plans and do not foresee a short-term impact due to these delays,” Coca-Cola wrote in an annual report. “However, we may see tighter supplies of some of these ingredients in the longer term should production or export operations in China deteriorate.”
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In its report, the company listed sweeteners used in its beverages, including aspartame, acesulfame potassium, sucralose, saccharin, cyclamate, and steviol glycosides. Coca-Cola indicated that it considered sucralose, commonly known as Splenda, a “critical raw material” obtained from suppliers in China and the U.S., the report said.
Coca-Cola said it is taking precautionary measures with its employees in China to prevent further spread of the virus.
“The safety and health of the company’s associates remains a high priority,” according to the statement by the company.
Face masks, hand sanitizers and other installations such as health monitoring systems will reportedly be implemented in Coca-Cola factories in China.
The company did not indicate specific delayed supply chains, but estimated its case volume could diminish by 2 or 3 percentage points, organic revenue by 1 or 2 percentage points, and first-quarter earnings-per-share by 1 or 2 cents.
As of Thursday, Mainland China reported 78,500 cases of the coronavirus, with 2,641 deaths in the Hubei province where the virus originated, according to Johns Hopkins data.