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The Company has business relationships with three types of bottlers: independently owned bottlers, bottlers in which the Company has a noncontrolling ownership interest and bottlers in which the Company has a controlling ownership interest.
Of these, independently owned bottlers produced and distributed approximately 40% of the Company's total worldwide unit case volume in 1996; cost or equity method investee bottlers in which the Company owns a noncontrolling ownership interest produced and distributed approximately 45% of such worldwide unit case volume; and controlled and consolidated bottling and fountain operations produced and distributed approximately 15% of such worldwide unit case volume.
The Company makes equity investments in selected bottling operations with the intention of maximizing the strength and efficiency of the Coca-Cola business system's production, distribution and marketing systems around the world. These investments often result in increases in unit case volume, net revenues and profits at the bottler level, which in turn generate increased gallon shipments for the Company's concentrate business. When this occurs, both the Company and the bottlers benefit from long-term growth in volume, cash flows and shareowner value.
The level of the Company's investment generally depends on the bottler's capital structure and its available resources at the time of the investment. In certain situations, it can further the Company's business interests to acquire a controlling interest in a bottling operation. Although not the Company's primary long-term business strategy, owning a controlling interest may compensate for limited local resources or facilitate improvements in customer relationships as the bottling operations are built or restructured. The Company acquired controlling interests in certain bottling operations in Italy in 1995 and 1996, as well as in Venezuela in 1995. By providing capital and marketing expertise to newly acquired bottlers, the Company seeks to strengthen bottling territories.
In line with its long-term bottling strategy, the Company periodically considers options for reducing its ownership interest in a consolidated bottler. One such option is to sell the Company's interest in a consolidated bottling operation to one of the Company's noncontrolled equity investee bottlers. Another option for reducing the Company's ownership interest is to combine the Company's bottling interests with the bottling interests of others to form strategic business alliances. In both of these situations, the Company continues participating in the previously consolidated bottler's earnings through its portion of the equity investee's income.
Consistent with its strategy, in 1996 the Company sold its consolidated bottling and canning operations in France and Belgium to Coca-Cola Enterprises Inc. Also, during 1996 the Company sold a 33% interest in four Turkish bottling and distribution operations to Anadolu Endustri Holding A.S. ("Anadolu") and one of Anadolu's subsidiaries. Two subsidiaries of the Company, which continue to hold a controlling interest, entered into a joint venture agreement with Anadolu and its subsidiary to operate these four entities.
In 1996, a German anchor bottler, Coca-Cola Erfrischungsgetraenke A.G. ("CCEAG"), was established through the merger of the Company's previously wholly owned east German bottler with three other independent bottlers. As a result of the merger, the Company through a German subsidiary now owns a 45% interest in CCEAG.
Also in 1996, the Company combined its bottling interests in Venezuela with the Cisneros Group's bottling companies to form a new joint venture, Embotelladora Coca-Cola y Hit de Venezuela, S.A. ("ECHV"). A subsidiary of the Company owns a 50% interest in ECHV. In cases where the Company's investments in bottlers represent noncontrolling interests, the Company's intention is to provide expertise and resources to strengthen those businesses. In particular, the Company seeks to improve sales and marketing programs, assist in the development of effective business and information systems and help establish appropriate capital structures. In 1996, the Company purchased interests in two Chilean bottling companies: a 17% interest in Embotelladoras Polar S.A. and a 6% interest in Embotelladora Andina S.A. which was further increased to approximately 11% in early 1997. In addition, in early 1997 the Company sold to Coca-Cola Enterprises Inc. the Company's unconsolidated 49% interest in Coca-Cola & Schweppes Beverages Ltd., the leading marketer of beverage products in Great Britain.
The Company designates certain bottling operations in which it has a noncontrolling ownership interest as "anchor bottlers" due to their level of responsibility and performance. Anchor bottlers, which include Coca-Cola Amatil Limited and Coca-Cola Enterprises Inc., are strongly committed to their own profitable growth which, in turn, helps the Company meet its strategic goals and furthers the interests of its worldwide production, distribution and marketing systems. Anchor bottlers tend to be large and geographically diverse with strong financial and management resources. In 1996, the Company's anchor bottlers produced and distributed approximately 30% of the Company's total worldwide unit case volume. Currently, eight companies are designated as anchor bottlers, providing the Company with strong partners on every major continent around the world.