There are 3 main competing threats for CCL sales revenue -...

There are 3 main competing threats for CCL sales revenue - discount price competition with Pepsi, taste/health benefit competition with other drink formats and Indonesian market penetration.

Meanwhile there is one major plus - the clear consumer preference for Coke Zero.

By far and away the most significant of the threats is the 'new sobriety' post GFC - where lower prices are expected in order for buying larger quantities.

Judging by my visits to Coles, the cost competition has 'bottomed'. The price/volume metrics are up about 20% from last year.

I've formed the view as a result that the largest damage to Australia/Nz earnings has already occurred - and further we are likely to see gradual improvement in earnings as the economy continues to normalise.

The health competition issue I feel - as said elsewhere - is overstated given it has been an issue since the 80s. Population increases are a positive and I think this will largely net off, given CCL will also have water and other non carbonated income.

So for me - the key unknown is whether Indonesia proves to be a cash drain or cash generator.

But - if the market gets confidence in CCL's core non Indonesian earnings stability and growth - the p/e ratio will likely go from 14 to 19+ - and off a larger earnings base the rerating would be fairly attractive.