Coca‑Cola generated last year more than 5.6bn Czech crowns for the Czech economy while supporting more than 5,000 jobs. These conclusions stem from a new unique study on economic and social impacts, conducted by independent, reputable consulting firm Steward Redqueen. The Coca‑Cola System, meanwhile, has announced a further increase in its record investments in the Czech Republic – it plans to invest over CZK 3bn by 2021 in latest technologies.
“The Czech Republic is now celebrating 30 years since the Velvet Revolution and the modern history of Coca‑Cola in the Czech Republic is almost as long as that period. At the same time, we are convinced that thanks to large investments and localization we are much more Czech than people suspect. We have therefore decided to highlight our impact on the Czech economy and society with independent figures,” said Natalia Stroe, Director of Coca‑Cola Czech Republic.
“In the past three years we have invested a record amount in the Czech Republic, primarily in the modernization of the production plant in Prague Kyje, which we want to turn into a plant of the future. This year, we have decided to further increase investment in the Czech Republic. We bought the Toma plant in Teplice nad Metují and we are also planning new investments here. We are preparing a fully automated warehouse integrated into the production plant, which will eliminate the current traffic load between production and the external warehouse. We are also starting to supply tens of thousands of low-energy refrigerators to our customers and we are planning to invest significantly in environmentally friendly packaging with a higher proportion of recycled PET. In the period from 2017 to 2021, in all we will invest more than three billion crowns in the Czech Republic,” added CEO of Coca‑Cola HBC Czech Republic and Slovakia, Maria Anargyrou-Nikolic.
The Coca‑Cola System is made up of Coca‑Cola Czech Republic and Coca‑Cola HBC Czech Republic and Slovakia, which produces and distributes the beverage portfolio to customers. Drinks are the final products and many suppliers also contribute to the added value. The sale of beverages also creates value for customers – shops and restaurants. Thanks to a unique methodology, the study monitors the social and economic impacts throughout this value chain.
Coca‑Cola is local
Coca‑Cola in 2018 produced more than 317 million liters of beverages in its production facility in Prague-Kyje. In addition to deliveries in the Czech Republic, the company has been steadily exporting beverages to more than 10 neighboring countries, including Switzerland and Austria. Beverage production has risen approximately threefold since the establishment of the plant in the early 1990s. Last year, the company had approximately 40,000 customers in the Czech Republic (supermarkets, shops, restaurants, cafes), selling more than 200 kinds of drinks in various packages. Consumers spent about CZK 8.25bn on Coca‑Cola products. And 69% of each invested crown remained in the Czech economy as income. At the same time, the company purchased goods and services from domestic suppliers with a value of CZK 2.24bn last year.
The added value of the Czech economy was CZK 5.655 billion
The Coca‑Cola System itself created added value of CZK 0.964bn. The added value in the supply chain was CZK 1.87bn and the sum in the subscriber chain was CZK 2.82bn. The total added value corresponds to 0.1% of the Czech Republic's gross domestic product. Last year, Coca‑Cola directly paid CZK 776mn in salaries, while, indirectly, CZK 1.76bn went to salaries. Coca‑Cola also paid CZK 188mn into public budgets. The state gained another CZK 2.151bn indirectly. Together these last two figures made up 0.2% of tax revenues in the Czech Republic.
Impact on employment – more than 5 500 people
The Coca‑Cola System employed 828 people in 2018. Another 1,600 jobs were created by suppliers and about 3,000 jobs were created by customers. For each job in the Coca‑Cola System, there were five additional supported jobs for suppliers and customers. In 2019, the company's workforce continued to increase – for example, the acquisition of the Toma plant meant more than 50 new employees were taken on board.
Sustainability and communities
Coca‑Cola HBC has also published its sustainability report 2018. Among other things, it shows that since 2010 the company has reduced CO2 consumption per liter of beverage produced by 70% to 32.6 g. Water consumption has dropped from nearly 3 liters per liter of beverage produced to 1.92 liters over a decade. In the same period, the production plant Praha-Kyje increased its proportion of recycled waste from 52% to 99% and all electricity for this plant comes from renewable sources.
Coca‑Cola is a leader in using recycled plastic in its packaging. PET bottles are made of 10-45% of “rPET” (recycled PET). For colored glass bottles, 75% of the glass is recycled. Coca‑Cola HBC 22 years ago initiated and co-founded the authorized packaging company Eko-kom, thanks to which approximately 80% of PET bottles are collected in the Czech Republic today.
Within the community, Coca‑Cola HBC has developed its flagship project To Dáš! (“You can do it!”), which helps disadvantaged young people in the labor market. In 2018, 492 people were trained under the project. Some of the training took place in cooperation with the Tereza Maxová Foundation which helps young people from children's homes. In this area, Coca‑Cola HBC Czech Republic and Slovakia has provided help over the long term. The company has contributed more than CZK 20mn to children's homes over the past 15 years.
About the study
The Social and Economic Impact Study (SEIS) was created by economists from international company Steward Redqueen. The study is based on audited economic results from 2018.
The study quantifies the impact of the Coca‑Cola System on its value chain. The authors identify the impact indicators as household income, government income, corporate income and employment. The authors also followed everything systemically throughout the company – they followed the path extending from suppliers of key raw materials and services, through the Coca‑Cola System, to business partners. The overall impact of the system is then quantified by monitoring cash flows in the Czech economy using an economic model that combines Coca‑Cola's financial systems and official statistics. Added value (salaries, taxes and profits) and supported jobs in the Czech Republic are also estimated in each round of expenditure.
The methodology of this study is based on the work of a Nobel Prize winner in economics, Russian-American scientist Wassily Leontief. Steward Redqueen has offices in Amsterdam, Barcelona, Singapore and Princeton. It has conducted similar social and economic impact studies in more than 30 countries. The first Czech SEIS study was created in 2014.