John, very reasonable post. My main issue is that, in Australia, CCL faces two problems which go to the heart of its moat- namely the ability to increase prices and its distribution might. In Australia, both of these are being eroded by the power and reach of the two major retailers. There is also the issue of stagnant volume growth, but that is not something I am concerned with as much as the two major issues critical towards maintaining its moat.
I am not familiar with the landscape in Indonesia, however, it would be reasonable to infer that CCL's advantages of brand strength, distribution coverage, and economies of scale could best be leveraged in a landscape of fragmented retailers.
It also appears to me that the current CEO, based on her public statements and interviews, does not appear to have a clear grasp on the major issues. During her recent interview with Alan Kohler, she must have used the word "dynamics" more than a dozen time. For example:
AK: Alison, what is your strategy going forward?
Watkins: The current situation certainly presents interesting dynamics Alan.
Try as I might, I cannot figure out a strategic move that would make sense in terms of maintaining CCL's moat in Australia. And it appears to me that the current CEO has not exhibited/demonstrated that she could figure it out either.
CCL Price at posting:
$9.49 Sentiment: None Disclosure: Not Held
