THE SOCIO-ECONOMIC IMPACT OF

THE COCA-COLA SYSTEM IN SERBIA

Prof. Ethan Kapstein, INSEAD

Dr. René Kim, Willem Ruster MSc, Beatrijs van Manen MSc

Decembеr 2011

OF OUR EMPLOYEES

IN THREE FACTORIES ACROSS SERBIA

ARE MAKING EVERY DAY REFRESH-

MENTS FOR MILLIONS OF CITIZENS IN

THE REGION.

NEW JOB OPENINGS

ARE REGISTERED IN SERBIA AS A DIRECT

CONSEQUENCE OF ONE NEW WORK-

PLACE CREATED IN OUR COMPANY.

MILLION EUR

HAS BEEN INVESTED IN PROCUREMENT

OF LOCAL GOODS AND SERVICES.

345MILLION EUR *

IS THE TOTAL SUM OF OUR COMPANY'S

CONTRIBUTION TO THE GDP OF SERBIA.

69

* direct and indirect contribution* direct and indirect contribution

Content

Introduction

The socio-economic impact of the Coca-Cola system in Serbia

Scenario: Import instead of local production

The purpose of the report

1.1. The Coca-Cola system in Serbia

The Coca-Cola in Serbian economy: an Overview

Methodology

Current economic impact

4.1.Direct value added of “going concern” operations

4.2.Total value added of “going concern” operations 4.3.Employment related to “going concern” operations

Scenarios analyses

5.1.Cofinancing of local production

5.2.Other possible scenarios

Coca-Cola and local community

Conclusions

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6

7

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7

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INTRODUCTION

04

We present you a study "Socio-economic impact of the Coca-Cola system in Serbia" done by

the consulting company Steward Redqueen. This report is part of a series of documents prepared

for the members of the Coca-Cola system in Europe. Its purpose is to show, using an economic

model, the degree of influence of Coca-Cola system in the countries in which it operates, and where

the influence is defined as the value added and employment incentive.

Between January and November 2011, Prof. Ethan B. Kapstein of INSEAD University, in collaboration

with Dr. Rene Kim, Mr. Willem Ruster MSc and Ms. Beatrijs van Manen MSc from Steward Redqueen

company in Harlem (the Netherlands), carried out a study on the impact of the Coca-Cola system on

the Serbian economy. This study was based on an economic model which consists of “driving”

the financials of the Coca-Cola system through the input-output tables of the Serbian economy.

Consulting company Steward Redqueen is a consultancy firm at the interface of business and

community and offers insight into the challenges, risks and business opportunities based on their

interdependency. The Steward Redqueen company provides strategic consulting services in the

following areas: socio-economic impact assessment, developing market finances, environ-

mental, social and corporate governance. The Steward Redqueen team has a strong track

record in this area – not least because majority of its members have been part of Triple Value Strategy

Consulting. Since 2006 Steward Redqueen has completed 22 individual studies in the food and

beverage sector. Steward Redqueen has also performed socio-economic impact assessment for

multinational mining companies, financial development institutions, banks and recreation organizations

in Africa, Asia, South America and Europe. On these projects Steward Redqueen cooperates with

INSEAD professor Ethan B. Kapstein, who is an associate partner of Steward Redqueen. For more

information, visit www.stewardredqueen.com

Professor Ethan B. Kapstein holds the INSEAD Chair in Political Economy at INSEAD, an

international business school with campuses in Fontainebleau (France), Singapore and Abu Dhabi.

Previously he held positions at Harvard University, the University of Minnesota and the Organization

for Economic Development and Cooperation (OSCE). Professor Kapstein serves as an economic

and strategy consultant to government agencies and many of the world's leading multinational

corporations.

The model of socio-economic impact assessment

The model of socio-economic impact assessment measures the direct and indirect impact of a company

on the country in which the company operates. The presence of foreign companies is often

perceived differently by different people. Some regard them as providers of economic activity, jobs

and wages while others see them as extractors of (hard) money, exploiters of cheap labour, or polluters

of the environment. It's hard to find a middle ground between these two extremes that affect the

opinion of stakeholders. Therefore, the model chosen in this study based its findings on the quantified

direct and indirect company impact on the economy.

05

SOCIO-ECONOMIC IMPACTOF THE COCA-COLA SYSTEM

IN SERBIA

This study was based on an economic model which consists of “driving” the financials of the

Coca-Cola system through the input-output tables of the Serbian economy.

The analysis distinguishes between:

direct ( re lated to Coca-Cola i tse l f ) ,

indirect ( re lated to t rade partners and suppl iers ) ,

induced impacts ( re lated to household spending) .

The main results are presented in terms:

of va lue added (defined as household income, tax revenues, and company profits

and sav ings) and employment generat ion att r ibutable to the Coca-Cola system.

08

The direct value added of Coca-Cola

system is EUR 25 million (0.08% of GDP),

and is associated with EUR 345 million of

value added to the Serbian economy (or

1.18% of GDP). Therefore, every Euro of value

added at Coca-Cola relates to 13 Euros value

added in the Serbian economy;

MILLION EURDIRECT VALUE ADDED

The tax payments of the Coca-Cola

system is EUR 3 million and is associated

with 107 million euros tax flows to the

Government , accounting for 1.6 percent

of total Serbian tax income. Therefore,

every euro of Coca-Cola tax payments relates

to 35 Euros of tax payments in the broader

economy;

MILLION EURTAX PAYMENTS

The Coca-Cola system employs 1,300,

and relates to 18,500 jobs throughout the

Serbian economy (or 0.62% of total Serbian

labour force). Every job at Coca-Cola relates

to 13 jobs in the broader economyEMPLOYEES

The major conclusions, based on fiscal year 2010 data, are as follows:

09

HYPOTHETICAL SCENARIO - IMPORT INSTEAD OF PRODUCTION

In order to get best possible quality data, a hypothetical scenario applicable to Coca-Cola has been

analysed using this model. It emphasises the impact of local production in comparison with a hypo-

thetical situation in which all beverages are imported and only local distribution and trade channels

are used. The analysis of such scenario has yielded the following conclusions:

While consumers often perceive Coca-Cola beverages as the product of a multinational company

seated in Atlanta in Georgia (USA), they are actually produced by a local bottler Coca-Cola Hellenic

(CCH) in Serbia, which buys syrup concentrate from The Coca-Cola Company (TCCC). The bottling

plant employs local workforce and generates revenue directly at the factory, but also supports the

employment, earnings and tax revenue for the entire economy through the purchase of goods and

services from various suppliers and selling their products through a widely diversified distribution

network (including hotels, restaurants and supermarkets), where a large part of the revenue depends

on the consumption of Coca-Cola products. This means that Coca-Cola is largely a domestic

company in the countries in which it operates.

This raises the question, what if Coca-Cola products were imported rather than produced locally?

That scenario is taken up at the end of this Report. As will be seen, the impact on jobs, incomes,

and tax revenues would be significant. Coca-Cola provides more than refreshment to the countries

where it operates: it also provides a source of economic growth and vitality.

In order to analyze the impact of the Coca-Cola system, a special economic model has been developed

based on input-output analysis, which describes the linkages between the different sectors of the

economy. Section 1 provides an overview of the Coca-Cola system in Serbia; Section 2 briefly

describes the business context while Section 3 describes the model used; Section 4 provides an

overview of the economic impact of the Coca-Cola system, while the results of scenario analysis are

presented in Section 5. Section 6 deals with the Coca-Cola system in Serbia and its community

efforts. The conclusions are given at the end.

When substituting imports for Coca-Cola's local operations, the Serbian

economy would suffer a loss of EUR 51 million in value added (or 0.17% of

GDP) and almost 2,700 jobs (or 0.09% of total labour force).

million EUR

11

1

THE COCA-COLA SYSTEM IN SERBIA

THE PURPOSEOF THE REPORT

The Coca-Cola Company has been present in Serbia since 1967, when a license was granted to a

local company to produce and sell Coca-Cola products in the country. The following year a new

bottling factory producing Coca-Cola started its operations in Zemun, Batajnicki Drum Street, at the

very same location where it is still produced today. At the present time, the Coca-Cola System in

Serbia comprises a bottler, Coca-Cola Hellenic Serbia (Coca-Cola HBC Serbia) and Coca-Cola

Barlan S&M, a subsidiary of The Coca-Cola Company.

1.1 THE COCA-COLA SYSTEM IN SERBIA

Exhibit 1: Map of Serbia, including CCH Serbia’s main locations

Today, Coca-Cola Hellenic Serbia is one of the largest companies in the non-alcoholic beverage

industry in the country. It employs 1,300 people, and the business is divided into three units:

Coca-Cola Hellenic Serbia (soft drinks), Vlasinka (mineral water), which was acquired in 2005, and

Fresh & Co (juices and fruit juices), acquired in 2006. Coca-Cola Hellenic Serbia is located in Zemun,

occupying an area of about 65,000 m2 and consists of six production lines, warehouses and offices.

DISTRIBUTION CENTER

Subotica

Sombor

Odžaci

Bačka Palanka

Vlasinka

Novi SadVršac

Šabac

Ruma

Loznica

Vojvodina

Belgrade

SERBIAČačak Paraćin

Niš

Kragujevac Bor

Užice

Kraljevo

Zaječar

Kruševac

Novi Pazar

Leskovac

Pirot

Vranje

PrištinaPeć

Uroševac

Prizren

Kosovo

PRODUCTION PLANT

14

There are four distribution centers across the country that supply around 37,000 distributors and

retailers, who, in turn, serve about 7.9 million consumers in Serbia. The product portfolio includes

the world`s leading brands such as Coca-Cola, Coca-Cola Zero, Fanta, Sprite, Schweppes, Nestea,

Burn and Ultra Energy as well as local brands such as Rosa, neXt, Su-voce and Joy.

Exhibit 1 shows the main location of the Coca-Cola Hellenic Serbia.

EMPLOYEES

PLANTS

DISTRIBUTION

CENTERS

DISTRIBUTORS

AND RETAILERS

CONSUMERS

15

2

COCA-COLA INTHE SERBIAN ECONOMY

Exhibit 2: GDP growth of Serbia vs European Union

2001.2002.

2003.2004.

2005.2006.

2007.2008.

2009.

2010.

10%

8%

6%

4%

2%

0

-2%

-4%

-6%

Source: Eurostat Serbia European Union (27 countries)

2. COCA-COLA IN THE SERBIAN ECONOMY: AN OVERVIEW

Like every business, the Coca-Cola system depends on the economic environment in which it operates.

The economic crisis of 2008-2009 dealt Serbia a sharp setback, leading the country to seek a EUR

4 billion Stand-By Arrangement with the International Monetary Fund (IMF) in 2009. Prior to the crisis,

Serbia experienced a relatively healthy GDP growth of nearly 7 percent in 2007, which was followed

by decline to 3 percent in 2009 and 1.8 percent in 2010. Despite the attractiveness of Serbia as a

export distribution platform, foreign direct investment fell below one billion euros in 2010. Average

income of about 440 euros per capita is still much below the European average, while the official

unemployment rate reached more than 19 percent in 2010.

Exhibit 2 and Table 1 show data on the Serbian economy. Table 1 also shows how Coca-Cola

operates in Serbia.

17

Table 1: A snapshot of the Serbian economy in 2010

Tax receipts as % of GDP in 2008.

Source: MMF, World Bank

Household consumption as % of BDP

Coca-Cola system share

Serbian economy

18

METHODOLOGY

3

Exhibit 3: Several rounds of impact make up the total effect

of Coca-Cola system in Serbia on the Serbian economy

(arrows are representing expenditures in money terms)

In the process of producing, packaging, promoting and delivering Coca-Cola products to

the final customer, the Coca-Cola system stimulates economic activity throughout the

entire value chain. That means its own operations have a supporting effect on upstream as

well as on downstream businesses. The upstream local suppliers and producers are more

dependent on the demand of the production plants of raw materials than the distributors

and retailers which distribute the company’s products. Both the supported upstream and

downstream activities create income and tax revenue and in turn stimulate economic

activity in their respective value chains.

Indirect (2 Round) Impact (Economic impact of (suppliers’) suppliers)

Induced (3 Round) Impact :

Indirect (1 Round) Impact (Direct suppliers and Trade)

Direct (0 Round) Impact

(Coca-Cola)

Coca-Cola

Hellenic in Serbia

Coca-Cola

suppliers of

goods & services

Consu

mptio

nC

oca

-Cola

pro

duct

s

Trade

nd

th

rd

Re-spending of salaries

stCoca-Cola

Company in Serbia

20

Exhibit 3 depicts the approach taken to quantify the economic activities linked to the Coca-Cola

system. On the left hand side, the starting point for the analysis is the final Coca-Cola consumption

that can be traced in money terms throughout the economy. When a consumer buys a bottle

of a Coca-Cola drink in the supermarket a part of what he spends is revenue for this supermarket,

another part goes to the distributor that transported this product from the production plant to

the selling point and part of it goes to the Coca-Cola bottler. All of these parties procure

goods and services from suppliers, pay salaries and taxes, invest and make profit. To capture

the impact, the total consumption figure of Coca-Cola products serves as initial injection into

a so-called Social Accounting Matrix which represents all sector interlinkages in a local

economy (for details see Appendix I). In doing so, the total economic impact related to the

presence of the Coca-Cola system can be traced and are divided into several effects:

• Direct (0 Round) impact: effects directly related to expenditures of the local Coca-Cola

bottler and the local TCCC entities. That includes salary and (income) tax payments as well

as profits generated that remain in the local economy and direct employment at the company;

• Indirect (1 Round) impact: Direct suppliers and Trade: effects arising at

upstream-suppliers and downstream-retailers in the value chain of Coca-Cola products

(e.g. jobs and salaries provided by suppliers and retailers);

• Indirect (2 Round) impact: (suppliers’) suppliers: effects that come about as suppliers

and retailers inside the original value chain of Coca-Cola products procure goods and

services from suppliers outside the original value chain of Coca-Cola products which pay salaries

and taxes as well (e.g. employment and salaries generated by suppliers’ suppliers);

• Induced (3 Round) impact: re-spending of salaries: effects caused by the re-spending

of salaries by employees of Coca-Cola, its trade partners and (suppliers’) suppliers

whose jobs are directly or indirectly supported by Coca-Cola.

st

nd

rd

th

21

CURRENTECONOMIC IMPACT

4

In this Report an input-output model, as described in a previous section, has been applied to

determine the economic impact of the Coca-Cola system. This section reports on the major

results. First Coca-Cola’s impact on value added (incomes, profits and taxes) within Serbia is

discussed. The employment generated by the Coca-Cola system, and its impact on the income

distribution, is discussed subsequently.

423

138 153

76

176

32

8 7

TotalConsumptionCoca-Cola

Serbia

VAT Off-trade

Margin

On-trade

MarginNet

RevenuesCoca-Cola Hellenic

Serbia

TCCCexpenses

TotalCoca-Cola

System Serbia

Netexports

Local procurement: EUR 69 mil

Taxes:EUR 3 mil

Salaries: EUR 22 mil

Direct Value added

4.1 Direct value-added of ’going-concern’ operations

A company’s value-added is defined as its revenues minus the cost of all goods and services. In other words, it is equal to a company's salary and tax payments and its profits. To arrive at the direct value-added for the Serbian economy, one has to subtract the salary and tax payments and profits that accrue to foreign shareholders. Exhibit 5 shows the value-added related to Coca-Cola Hellenic Serbia and Coca-Cola Serbia.

The total consumption of Coca-Cola products in Serbia is EUR 423 million, of which EUR 76 million VAT (included in retail prices), and respectively EUR 32 million, EUR 176 million and EUR 138 million for off-trade margin, on-trade margin and Coca-Cola Hellenic Serbia revenues.

Exhibit 5: Direct value added related to the Coca-Cola

system in Serbia (in million Euros)

24

Business activities contribute to the national economy in part through its generation of

incomes, profits, and taxes, or what is called “value added.” As can be seen in Exhibits

6 and 7, the Coca-Cola system contributed over EUR 345 million of value added to the

Serbian economy in 2010. The single greatest economic beneficiary of the Coca-Cola system's

activities (including production and consumption of beverages) was Serbian households,

which received one-third of this amount, followed by companies in Coca-Cola’s value chain;

the Serbian government was also a major recipient of value-add, enjoying tax revenues of

nearly EUR 107 million. The breakdown of these tax revenues in Coca-Cola’s value chain

is shown in Exhibit 8. In addition, one could also consider the re-spending of salaries that

are paid by Coca-Cola, trade parties and suppliers (i.e. induced effects). This leads to an

extra effect of EUR 76 million of value added.

4.2 Total value-added of ’going-concern’ operations

The combination of CCH revenues (from local revenues and exports) and Coca-Cola Serbia represents the Coca-Cola system in Serbia, and amounts to EUR 153 million. Of this, EUR 3 million are tax pay-ments, and EUR 22 million are net salaries. These taxes and salaries repre-sent the direct value added of EUR 25 million, or 0.08% of the GDP.

The basis for the broader eco-nomic effects are the trade mar-gins (total EUR 208 million) and the local procurement of goods and services (EUR 69 million), see Section 4.2.

ADDEDVALUE

25

25

Exhibit 6: Value added related to the Coca-Cola

system in Serbia (in million Euros)

Exhibit 7 examines the value added per sector. As it can be seen, the on-trade sector is particularly

significant in terms of value added generated, amounting to nearly EUR 138 million, thanks to the

production and sale of Coca-Cola products. The on-trade sector’s generation of value added suggests

the growth of Serbia as a tourist destination.

Round 3: re-spending of salaries

Round 2: suppliers’ suppliers

Round 1: direct suppliers and trade

Round 0: Coca-Cola system

total income for Serbia

Households Income Profits & Savings Tax income Total

127 421

151

142

282

38

76

16

17

5

95

30

98

21

127 mil €

112 mil €

107 mil €

345 mil( = 1,18% of GDP)

€

89

25

22

3

25

26

Exhibit 7: Value added per sector related to the

Coca-Cola system in Serbia (in million Euros)

Exhibit 8: Breakdown of taxes in Coca-Cola’s value

chain in Serbia (in million Euros) 4

Round 3: re-spending of salaries

Round 2: suppliers’ suppliers

Round 1: direct suppliers and trade

Round 0: Coca-Cola system

Some numbers may not sum up due to rounding.

Round 2: suppliers’ suppliers

Round 1: direct suppliers and trade

Round 0: Coca-Cola system

Coca-ColaSerbia

Agriculture Manufacturing Services Transport Wholesale Retail On-trade VAT &Households

Taxes

Total

421

282

38

76

1817

2558

45

4

downstreamupstream

88

138

28

345 mil( = 1,18% of GDP)

€

25

76,1

11,2

2,09,0

3,2

5,2

2,7 0,50,0 1

06,8

= 1

,6%

of to

tal t

axes

106,8

Corporatetax

Payroll tax

OtherTaxes

VAT onCoca-Colaproducts

Total taxespaid by

Coca-ColaSerbia

Taxespaid by

Suppliers

Taxespaid by

Off-Trade

Taxespaid by

On-Trade

Taxespaid by

suppliers’suppliers

Total

98.3

5.2

3.2

27

The United Nations (UN) and the Serbian Statistical Office publish detailed information on

a regular basis about the condition of the labour market in Serbia. This information, when

used in conjunction with the output per sector data obtained from Serbia's Social

Accounting Matrix (SAM), enables the generation of statistics on the employment

intensity (i.e. number of jobs per EUR of output) of the Coca-Cola system. In the same

way, estimates can be provided of employment supported by the Coca-Cola system at

the sectoral level, indicating which sectors in particular are most “dependent” on the

production and sale of Coca-Cola products.

Approximately 1,300 direct workers in the Coca-Cola system support more than 18,000

jobs, or 0.62% of the labour force, throughout the Serbian economy, for a multiplier effect

of 13; to put this in other words, each direct Coca-Cola worker helps to support 13 other

workers throughout the Serbian economy. Again, when considering also the re-spending

of salaries (i.e. induced impact), the extra effects on jobs is 3,400.

Sectors that are closely related to Coca-Cola Hellenic Serbia are sugar manufacturing,

transport and trade. The company expense of sugar relates to 450 jobs at the sugar

manufacturing level, and indirectly to 110 jobs at the farmer level. Regarding the

transport sector, the upstream transport of raw materials and the downstream transport of

finished products relates to 200 jobs. The trading parties, involved in selling the Coca-Cola

products to the consumer, are associated with 13,000 jobs: 11,000 jobs in HoReCa sector (i.e.

immediate consumption), and 2,000 jobs in off trade (i.e. future consumption). Coca-Cola

value added per job is above the republican average.

4.3 Employment related to ’going-concern’ operations

d information on

ormation, when

Serbia's Social

he employment

m. In the same

Cola system at

pendent” on the

ore than 18,000

multiplier effect

upport 13 other

the re-spending

manufacturing,

bs at the sugar

Regarding the

eam transport of

g the Coca-Cola

ReCa sector (i.e.

ion). Coca-Cola

operations

The net VAT payment related to Coca-Cola payments is EUR 76 million, assuming that 100% is paid by all parties involved.

28

5

SCENARIOANALYSIS

5.1 Co-financing local production

One of the objectives of economic impact analysis is to enable management to analyse the

broader socio-economic impacts of its hypothetical decisions. These scenarios give useful

insights into „what if“ situations since the policy changes of the company and government (e.g.

change in tax regime) or changes in the economic climate create new economic environment.

In this Report, one hypothetical scenario analyses what would have happened if Coca-Cola

had decided in 1967 to import rather than to locally produce in Serbia.

Like every business, Coca-Cola bottlers are subject to external economic pressures which

determine whether or not to remain in business. Imagine a situation where:

• Local Coca-Cola Hellenic Serbia production is replaced by importation of all final Coca-Cola products;

• Coca-Cola Hellenic Serbia becomes a trade company of imported Coca-Cola products, while

The Coca-Cola Company remains the marketer of the Coca-Cola products in Serbia.

These changes would have a profound effect on the Serbian economy. The value added

generated by the Coca-Cola system would tumble by about EUR 51 million (or

0.17% of GDP). This means lower household incomes, corporate profits, and tax revenues.

The decrease of salary re-spending (i.e. induced or 3rd round effects) would lower the

value added with an extra EUR 17 million. Employment would fall by 0.09% of the labour

force, with the loss of some 2,700 jobs. These numbers indicate the fillip that Coca-Cola

provides to Serbian stakeholders up and down the value chain, including government

and households. The induced effects leads to an extra job decrease of 780.

employment fall

millioneur

30

5.2 Other possible scenarios

In addition to the provided scenario, other scenarios could be developed which might be

of interest to Coca-Cola and its stakeholders:

• Change in tax regime (e.g. introduction of a „sugar tax“);

• Increase of home consumption at the expense of out-of-home (e.g. restaurant) consumption;

• Extension of production or distribution facilities;

• Increase of local sourcing;

• Impact of the Coca-Cola system on different income groups;

• Breakdown of employment effects into skilled and unskilled labour;

• Breakdown of results on a state or province level;

• Energy consumption or CO2 per job or Euro value added in Coca-Cola value chain.

• Water consumption per job or Euro value added in Coca-Cola value chain.

31

6

COCA-COLA ANDLOCAL COMMUNITY

In addition to providing “private goods” to consumers in the form of soft drinks, and generating

profits for itself and for its suppliers and distributors, Coca-Cola also provides “public goods”

to Serbia as a whole, irrespective of whether or not the Serbian people purchase or use the

company products. These public goods take numerous forms but include “Corporate Social

Responsibility” (CSR) activities in such areas as environmental protection, education, helping

socially endangered groups, promoting active life and sponsorship of local activities including

sports and cultural events.

Coca-Cola system spent over EUR 223,000 on such programs in 2010.

Particularly notable in this regard was Coca-Cola’s emphasis on water management, including

in its own production process. Coca-Cola system supports a number of educational programs

that revolved around the water management theme, including “Danube Day.” At the same

time, the bottlers have reduced the amount of water they use in their own facilities. It is in

Coca-Cola’s interest to ensure the sustainability of national watersheds. Besides, through its

active engagement in this area, the company also supports broader national environmental

objectives.

Water management is among the most significant environmental issues that nations will face

in the 21 century, and by promoting more efficient water use the Coca-Cola system is contributing

to a major public good.

eurinvested in local communities in 2010

33

CONCLUSIONS

7

The following conclusions can be drawn from the analyses reported on here:

1. Coca-Cola is a significant contributor to the Serbian economy:

a. EUR 25 million direct value added equivalent to 0.08% of GDP;

b. EUR 345 million economy-wide value added equivalent to 1.18% of GDP;

c. Every Euro of value added at Coca-Cola relates to 13 Euros of value added in the broader economy

of Serbia.

2. Coca-Cola contributes substantially to the tax income of Serbia:

a. EUR 3 million Coca-Cola tax payments are 0.06% of total tax income

b. EUR 107 million economy-wide tax income equivalent to 1.6% of total tax

income;

c. Every Euro of tax payments at Coca-Cola relates to 35 Euros of tax

payments in the broader economy.

3. Coca-Cola provides high-quality employment and is associated with a substantial

number of jobs in the wider economy:

a. High quality workforce of more than 1,300 with a value added per job of EUR 15,000, which is 1.5 times the GDP per Serbian worker; b. Total employment of almost 18,500 in the economy associated with the

Coca-Cola system in Serbia is 0.62% of the labour force. c. Every job at Coca-Cola relates to 13 indirect jobs in the broader economy.

4. The scenario analysis leads to the following conclusions:

a. When substituting Coca-Cola’s local operations by imports, the Serbian economy would

suffer a loss of EUR 51 million (or 0.17% of GDP) in value added and more than 2,700

jobs (or 0.09% of the labour force).

This study gives a detailed account of the socio-economic impact of the Coca-Cola

system in Serbia (both direct and indirect). With the economic model applied, the study

gives a scope of impact of the system in the community in which it operates, as well as

the impact its business has on relevant institutions, partners, employees, consumers and

the whole of economy.

35

For more than 40 years Serbia is our home and that's why its future is our responsibility also. Every day, with

our quality, stability and openness to the world - we create secure future for all people of this country. We're

here to stay and with our every deed we make our home a better place to live.