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Coca-Cola says coronavirus could cause Diet Coke shortages

Business Insider logo Business Insider 2/26/2020 Bethany Biron
© Mark Lennihan/AP  

    As the coronavirus takes its toll on the US economy and beyond, it may also impact production of a beloved beverage: Diet Coke.

    In its annual report published on Monday, Coca-Cola cited "delays in the production and export" of ingredients sourced in China including sucralose, a zero-calorie sweetener used in several of its diet products, as a result of the coronavirus outbreak.

    "As a result of the outbreak of the novel coronavirus COVID-19, beginning in January 2020, our suppliers in China have experienced some delays in the production and export of these ingredients," the report reads. "We have initiated contingency supply plans and do not foresee a short-term impact due to these delays. However, we may see tighter supplies of some of these ingredients in the longer term should production or export operations in China deteriorate."

    As of Wednesday, the coronavirus has infected more than 81,900 people in 41 countries and killed 2,770 since the outbreak began in China in December. The epidemic has led to the temporary closure of several restaurants and retailers in China, and in the subsequent weeks companies have started issuing statements regarding possible financial hits due to shuttered stores and supply chain delays.

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    In its report, Coca-Cola stated that it anticipates the epidemic will negatively impact financial results for the first quarter of 2020 and moving into the rest of the year.

    "While we currently expect this business disruption to be temporary, there is uncertainty around its duration and its broader impact, and therefore the effects it will have on our business," the report states. "However, based on our current expectations, we believe this disruption will negatively impact our unit case volume and financial results for the first quarter of 2020. At this time, we do not expect this disruption to have a significant impact on our full year 2020 unit case volume or financial results."

    Due to the widespread economic impact of the virus on international business, Nigel Green, CEO of financial services firm deVere Group, said in a statement on Wednesday the coronavirus may bring the world "to the brink of a global recession" in 2020.

    "Investors have largely been caught off-guard by the serious and far-reaching economic consequence of the coronavirus," Green said. "Clearly, this will hit global supply chains, economies across the world and ultimately government coffers too."

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