Coca Cola Amatil (ASX: CCL) has closed its Peats Ridge spring water bottling plant due to decreased demand. The facility, which opened in 2003 with a licence to extract 8 megalitres of groundwater per year, had recently been extracting 66 megalitres annually following lengthy legal battles with the Gosford Council.
Coca Cola announced that it would consolidate its NSW operations into its larger facility in Sydney, with the change resulting in four redundancies at the Peats Ridge plant. The company noted that the plant that it would "continue to maintain the site and continue to extract water under [their] current licence" with a small number of staff, however there are no firm plans in place for how much would be extracted.
The community was generally happy about the closure, with many concerned about the effect of the plant on the underground aquifer which supplies Gosford City. Locals believe the aquifer to be over-allocated, with the plant threatening the sustainability of the primary water supply to Gosford City.
Foolish takeaway
Coca Cola Amatil is rationalising its NSW spring water bottling assets with the aim of reducing costs and inefficiencies. The closure of the Peats Ridge plant appears to be a good result for all involved, with benefits to the community and a reduction in excess capacity from Coca Cola's operations.
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Motley Fool contributor Andrew Mudie owns shares of Coca Cola.
