Coca-Cola Amatil sales plunge on widespread COVID-19 lockdowns

Widespread community lockdowns, venue closures and restricted trading have smashed sales of Coca-Cola Amatil's drinks, with the company reporting a 33 per cent decline in April volumes.

The drinks giant released a trading update before the market opened on Tuesday, revealing that a full month of lockdowns severely disrupted what are traditionally peak trading periods of Easter, Anzac Day and Ramadan.

Whilst the impact in each market differed the company said it experienced a significant impact on margins, particularly in Australia, as lockdowns generated changes in the channels where drinks were purchased and in the mix of drinks sold.

The easing of restrictions in mid-May generated a modest improvement in conditions, with volumes down about 26 per cent in the first three months of May compared to the prior corresponding period.

The trading update from Coca-Cola, released to coincide with its annual general meeting being held on Tuesday, follows an update in April when the company said it would cut costs by $140 million in 2020. At the time it revealed plans to freeze staff recruitment, cut spending on travel and consultancies by more than $50 million, and cut incentive payments by more than $40 million.

Coca-Cola, which also has a significant alcoholic drinks business, also this morning reported a substantial decline in sales volumes for this division in April, down about 35 per cent in Australia as the strong trading periods of Easter and Anzac Day were hit by lockdowns and closures.

"At the time of our last COVID-19 update we noted significant volatility across channels and markets as the impacts of the pandemic started to take effect. This has continued," said Coca-Cola Amatil boss Alison Watkins.

"Since 1 April 2020 we have traded through the tighter COVID-19 lockdown restrictions, whilst simultaneously cycling the traditionally peak Easter and Ramadan trading periods. With many customers remaining closed or operating at significantly reduced capacity, there has been unprecedented disruption to trade," she said.

But Ms Watkins said the business was resilient and had been able to partially mitigate the impact of the trading disruptions with disciplined financial management, brand strength and its range of routes to market.

Coca-Cola Amatil shares closed up 5.2 per cent on Monday at $8.96.