Major beverage deal to quench BEE thirst

The empowerment transaction also includes provisions such as increasing sugar procurement from black farmers

07 February 2021 - 00:03 By NICK WILSON
Picture: REUTERS/JACKY NAEGELEN
Picture: REUTERS/JACKY NAEGELEN

Coca-Cola Beverages SA (CCBSA), the local bottling partner of the US soft-drink giant, on Friday unveiled a multibillion-rand empowerment deal that will result in its nearly 8,000-strong workforce ending up with a 15% equity stake in the bottling group, as well as board representation, in what has been described as one of the largest worker ownership schemes unveiled in the country.

The empowerment transaction also includes provisions such as increasing sugar procurement from black farmers.

Velaphi Ratshefola, MD of CCBSA, said: "It is very special because it recognises the value that our employees play in the future of the business and the sustainability of the business."

Ratshefola said the equity deal "will also align all the stakeholder interests - employees, trade unions and shareholders - together under a common agenda".

The value of the deal was not released because CCBSA is not listed, but Ebrahim Patel, minister of trade, industry & competition, said that "the most significant element in this package is the multibillion-rand worker equity provisions".

"From the side of government we see workers and their trade unions as important partners in the quest for deeper growth of the economy, more jobs for South Africans and greater inclusivity," said Patel. He described the deal as a "sweet spot" in a "difficult time for workers".

Patel said CCBSA will "put in place one of the largest worker ownership schemes in SA covering 15% equity in the SA company held by the almost 8,000-strong workforce". He said this would include "blue-collar workers and white-collar workers" and would also "strengthen a more inclusive transformation and BEE model".

Employees already hold 5% of CCBSA, so the latest deal involves workers being provided with a further 10% stake. A further 5% held by other empowerment groups brings the total BEE equity stake in CCBSA to 20%.

Patel said workers would receive two seats on CCBSA's board, which would bring "the insights and concerns of employees" into the "corporate governance of the company".

He referred to the German model, in which workers have had representation on large company boards, saying they have helped Germany build a "strong competitive economy where the rewards are fairly shared by all".

Patel said another provision in the group's empowerment transaction is that "Coca-Cola will work with the sugar industry to improve its procurement from black sugar farmers to encourage transformation in the sector and bring more small and black farmers into commercial agriculture".

He said CCBSA would support President Cyril Ramaphosa's calls for greater "levels of localisation" in the SA economy and support SA's economic reconstruction and recovery plan by making available R240m over a three-year period.

Explaining how the R240m would be made available, Ratshefola said CCBSA has agreed to contribute R80m each year to "localisation initiatives that form part of the national efforts to rebuild the economy".