Beverages supplier Coca-Cola Amatil will strip $100 million in costs from its operations after its half year profit fell almost 16 per cent.
The group warned the rest of 2014 would be tough, with earnings for the full calendar year expected to be less than in 2013.
Managing director Alison Watkins said the company had warned in April that trading conditions would remain difficult over the rest of 2014.
"We continue to expect this, and indeed since the federal budget in May we have experienced further deterioration and evidence of consumer/promotional fatigue consistent with weaker sentiment," Ms Watkins said.
"While it's too early for full year guidance, we expect earnings for 2014 to be materially below 2013.
"We are targeting savings of over $100 million over the next three years."
A review of the company's operations began in May, and the outcome is expected in October.
Initiatives to drive around 50 per cent of the savings were already underway, and the balance was in the detailed planning stage.
The bottler of soft drink, water and sports drinks made a net profit of $182.3 million in the six months to June, down on $216 million a year earlier.
It was clear that CCA was facing several challenges, especially in its Australian and Indonesian businesses, Ms Watkins said.
In the key Australian beverages business, earnings fell 14 per cent on the back of weak consumer sentiment, reduced or disappointing promotional activity, aggressive competitor pricing, and more private labels in the water and flavoured soft drinks segments.
A reduction in CCA's sales force had also resulted in an "own goal" as service to some smaller accounts failed to meet required standards, Ms Watkins said.
The Indonesian business also generated lower earnings due to the impact on costs of a fall in the value of the Indonesian rupiah, and increased competition that limited price increases.
Earnings from CCA's business in New Zealand and Fiji were flat in local currency terms.
CCA's alcoholic beverages business - which distributes brands including Jim Beam and Canadian Club - delivered a modest fall in earnings.
Ms Watkins said CCA was still committed to its Indonesian, alcoholic beverages, and SPC Ardmona packaged fruit businesses, and initiatives to boost their performance would be unveiled in October.
The company needed to adapt faster to changing market conditions and consumer tastes, she said.
The initial focus of the strategic review was on CCA's Australian beverage business, which was the most material contributor to group earnings.
Shares in CCA dropped 20 cents, or 2.6 per cent, to $9.54.
COCA-COLA AMATIL FACES CHALLENGING CONDITIONS
* Half year net profit of $182.3m, down 15.6 pct from $215.9m in 2013
* Revenue of $2.34b, up 0.5 pct from $2.32b
* Interim dividend of 20 cents a share, down from 26.5 cents
Share
