Coke Says Y2K Contingencies Are in Place

Beverage group Coca-Cola Co. of Atlanta said today it has a plan to ensure its worldwide distribution runs smoothly in the face of anticipated Year 2000 computer problems, but it has no control over some elements. "The readiness of governments is a big issue," Coca-Cola spokesman Bill Hensel said. "In many areas where we do business, the governments control the phone systems, the power systems and the water, so there is a major concern making sure the governments are adequately prepared. It's a big issue."

Hensel added, however, that Coca-Cola was well on its way to resolving Y2K issues and has backup plans in place. "We have contingency plans specifying what the company will do if it or third parties experience disruptions," he said. He added that Coca-Cola has spent $60 million on the Year 2000 computer glitch known as Y2K and anticipates spending between $130 million and $160 million overall.

The company, in a statement filed with the Securities and Exchange Commission, said its contingency plans include, "stockpiling raw and packaging materials, increasing inventory levels, securing alternate sources of supply and other appropriate measures." It said Coke began training employees for contingencies in the third quarter of 1998 and expects to have all training completed during the first half of 1999.

Coca Cola, which began working on Y2K in 1995 and has 40 employees dedicated full-time to the project, also said it has, "designated critical suppliers of products and services consumed on an ongoing basis that, if interrupted, would disrupt the company's ability to deliver products or conduct operations." Hensel said Coke is working with suppliers and distributors to ensure they have sufficiently addressed potential problems that stem from a decision by early computer programmers to save computer memory by eliminating the first two digits of years so computers read the year '98 as 1998, the year '99 as 1999 and the year '00 as 1900.

"The company currently believes that the greatest risk of disruption in its business exists in certain international markets," Coke said. Hensel said Coca-Cola has tried to make governments in the more than 150 countries where it does business aware of Y2K issues through forums such as a recent one with journalists in Nairobi, Kenya.