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Why the Coca-Cola Amatil Ltd share price is falling today

The Coca-Cola Amatil Ltd (ASX: CCL) share price fell 3.4% to $8.91 today after media reports claimed that it has suffered a double blow with two major clients going off the fizzy drinks maker.

It has been reported that fast growing pizza franchisor and takeaway store operator Domino’s Pizza Enterprises Ltd (ASX: DMP) has committed the sacrilegious act of dumping Coca-Cola in favour of its rival Pepsi Co. According to a Deutsche Bank numbers cruncher this could reduce Coca-Cola’s coke drinks volumes by up to 3%.

The other bad news is that major supermarket client Woolworths Limited (ASX: WOW) is reportedly refusing to stock Coca-Cola’s latest “Coca-Cola No Sugar” product that is being lined up to replace Coke Zero.

The blunt “No Sugar” marketing message from Coca-Cola Amatil is in response to consumers’ growing avoidance of sugary diets and especially sugar-heavy fizzy drinks. In fact multiple European countries have gone as far to implement a “sugar tax”, with several U.S. cities reportedly implementing a “soda tax” as well.

It’s possible that Australia may introduce a sugar tax as well, with the Greens Party said to be in favour of taxing sugary products rather than just encouraging people to stop sitting on their backsides.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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