Wal-Mart seen cutting bottled water brand space

NEW YORK (Reuters) - Wal-Mart Stores Inc may have cut the amount of shelf space it gives the bottled water brands of Coca-Cola Co and PepsiCo Inc, according to a prominent beverage analyst.

Bill Pecoriello of ConsumerEdge Research said he believes that beginning in April, Wal-Mart cut shelf space nationwide for Pepsi's Aquafina water and Coke's Dasani water by about 50 percent each as the world's largest retailer pushes lower-priced brands, including its own private label water.

Wal-Mart could even remove Aquafina and Dasani from its stores altogether, he said.

Pecoriello, who founded ConsumerEdge after leaving Morgan Stanley, said private label soft drink maker Cott Corp is likely picking up some of the space, along with other low-priced regional brands.

Spokesmen from Wal-Mart, Pepsi and Coke all declined to comment.

Pecoriello estimated sales to Wal-Mart make up about 12 percent to 15 percent of total volume for Aquafina and Dasani.

The pullback from Wal-Mart could also impact U.S. volume for the companies' bottlers, such as Pepsi Bottling Group Inc and Coca-Cola Enterprises Inc, Pecoriello said.

He estimated that bottled water makes up about 8 percent to 10 percent of U.S. bottlers' domestic volume, and could therefore impact volume trends in the second through fourth quarters.

Pecoriello noted that bottled water is a low-margin business, so the profit impact is much smaller than the volume impact.

Coke shares were down 0.3 percent to $44.98 on the New York Stock Exchange, while Pepsi shares were up 0.2 percent at $52.05.

(Reporting by Martinne Geller; Editing by Tim Dobbyn)