Can Costco kick the Coke habit?
As I was reading financial stories on the Internet I had the TV on and heard in the background that Costco (COST) had quit carrying Coke (KO) products. I knew that for years Coke was rumored to pressure stores and restaurants to carry only their products. Even today it's hard, almost impossible to find a restaurant where you can get both products.
I'm amazed as I go around to volume retailers how much Coke products vary in price. There seems to be no rhyme nor reason for this. You would think that Wal-Mart, BJ's, and Costco all pay the same price?
Both the Associated Press -- "Costco nixes Coke products over pricing dispute" and Bloomberg --"Costco stops restocking Coca-Cola products in dispute" have short articles but both Costco and Coke won't say much other than they are in price negotiations. Both stories quote a release from the company website that seems to have been taken down: "Coca-Cola has not provided Costco with competitive pricing so that we may pass along the value our customers deserve."
This is a dispute that will pay out behind closed doors but will effect many of us. My bet is that Coke won't budge. I think Costco needs Coke more than Coke needs Costco but either way I doubt if we will ever know if Costco got as good a deal as Wal-Mart. What do you think?
Disclosure: I do not hold positions in either company at the time of publication
Jim Van Meerten is a investor who writes on financial matters her and on Financial Tides. Please comment below or email FinancialTides@gmail.com