Coca-Cola Co. and Costco Wholesales Dispute

According to Yahoo.com Finance, Coca-Cola drinkers will no longer be able to buy their favorite drink at Costco Wholesales. On November 17th, Yahoo posted an article explaining that the pair are fighting over prices (http://finance.yahoo.com/news/Costco-nixes-Coke-products-apf-2225277826.html?x=0&sec=topStories&pos=6&asset=&ccode=). As shoppers continue to struggle with the recession taking place, retailers want to help their customers by giving them low prices. But that has been creating tension between product makers like Coca-Cola Co., who are working hard to maintain profit margins while meeting retailer demands.

“Beneath this surface of harmony, it’s a dogfight out there,” Gerry Khermouch, editor of Beverage Business Insights, said Tuesday at an investor meeting held by the soft drink maker at its hometown of Atlanta.

I can understand Coca-Cola Co.’s argument, but I do not necessarily agree with it. I like the idea that Costco Wholesales are giving back to their customers and that they understand that many people are struggling right now. Costco has been aggressive in putting up signs on store shelves and notices on its Web site and I think that is a very promising way of promoting this sale. At this point in time, Costco does not plan on taking down any Coke or Diet Coke products from the shelves, but they do not plan on restocking the shelves once the product is sold out, either.

“Costco is committed to carrying name brand merchandise at the best possible prices. At this time, Coca-Cola has not provided Costco with competitive pricing so that we may pass along the value our members deserve,” said a message on the company’s Web site labeled “Price Alert!”