Russian business daily Kommersant reported earlier that Coca-Cola had stopped placing ads on REN-TV, Channel Five, Domashny and Russia’s Defense Ministry’s channel Zvezda. That has been confirmed by The Coca-Cola Company (NYSE:KO) stating that it is rethinking its marketing plans following a drop in second-quarter sales.
Coca-Cola’s sales drop, not politics?
The company denied that the move had anything to do with present sanctions in place against Russia or the deteriorating situation in the Ukraine.
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“As a result of the evaluation of The Coca-Cola Company (NYSE:KO)’s beverage sales in the second quarter of 2014 in Russia, we have made a decision to change the plan of promotional activities on TV and focus on key federal channels and most efficient channels with regards to our target audience,” a company spokeswoman said by email.
“There is no political motive in this decision,” she said.
Just a coincidence?
While the company has made that clear, the timing and the ownership of the stations in question makes the suggestion that it’s not political a touch suspicious and the article from Kommersant quoted sources close to the affair saying that it was political owing to the fact that the owner of three of those channels has been personally targeted by Western sanctions.
REN-TV and Channel Five – are part of the media holding company National Media Group, which is owned by Yuri Kovalchuk’s St-Petersburg-based Bank Rossiya. Kovalchuk was targeted by the West for being the “personal banker” to Vladimir Putin and others close to the Russian president.
Kovalchuk also owns a 25-percent stake in CTC Media, the parent of the Domashny Channel, through Bank Rossiya’s subsidiary Telcrest.
Coca-Cola still advertises on 13 channels after dropping the four and points out that it still advertises on CTC and Peretz which are owned by CTC Media.
The article points out that Coca-Cola is one of the biggest advertisers in Russia at roughly $70 million a year. That is, however, dwarfed by Pepsico which spends nearly three times that amount each year.