Cola HBC, the second-largest bottler of Coca-Cola products, said rising tensions between Russia and the West would hit volumes this year.The company said volumes fell 3pc in the first half of the year, with sales revenue sliding 6pc to €3.18bn (£2.5bn) and net profits dropping 11pc to €99m.
Geo-political tension in Russia and Ukraine drove the decline, Coca-Cola HBC said. Volumes also fell in Poland, Romania, the Czech Republic, and Italy, which on Wednesday entered its fourth recession since 2008.
"We now expect the volume decline trend we have seen in the first half to persist in the remainder of the year," the company said, following a review of its volume outlook as a result of difficult economic and trading conditions and the sudden deterioration in Russia and other markets.
It added: "Although macroeconomic forecasts are being revised marginally upwards in some of the countries where we operate, unemployment levels remain high and disposable income is still constrained. Moreover, the escalation of the geopolitical situation in Russia and Ukraine has affected consumer spending in this region."
Russia is Coca-Cola HBC's largest market by volume. Analysts at Charles Stanley estimate the compounded annual growth rate in the country has been 10pc since 2003, with the flagship Coca-Cola brand seeing growth of more than 54pc since 2008.
Dimitris Lois, the chief executive of Coca-Cola HBC, said: "We continue to take action to mitigate the impact of the difficult trading conditions caused by depressed consumer sentiment and foreign exchange headwinds."
He expects falling costs and an easing of foreign exchange pressure to offset the fall in volumes for the full year.
Shares in Coca-Cola HBC edge up in early trading before falling at much as 5pc on Thursday as Russia retaliated against US and EU sanction. Dmitry Medvedev, the Russian prime minister, told a government meeting on Thursday that it would ban fruit, vegetables, meat, poultry, fish, milk and dairy imports from the US, the EU, Australia, Canada and Norway.
