The Hindu Business Line : Coke costlier by Rs 2 in select markets?

WHILE it is well known that carbonated soft drinks have become costlier by a rupee since last month, industry sources today indicated that the hike could actually be Rs 2 for Coca-Cola India's products in some select markets. They said the company has effected a Rs 2 increase in markets such as Tamil Nadu and Andhra Pradesh.

"Coke has increased prices by Rs 2in some markets in the South, including Tamil Nadu and Andhra Pradesh since it feels that consumers in these markets are willing to pay higher prices. Also, the higher quantum of price increase follows proportionately higher input costs in these markets," market sources said here.

They said higher input costs in these markets include higher distribution margins and other costs. When contacted, Coca-Cola India officials declined to comment on the issue. Thus, chhota Coke now costs Rs 7, while the 300 ml version comes for Rs 8 in some markets.

On its part, PepsiCo has already indicated that it was examining the possibility of another round of upward price revision around the beginning of next year. Does this mean a return to the Rs 10 pricing for a 300 ml bottle of soft drinks?

Analysts said while a return to the Rs 10 pricing level was not envisaged in the near future, the 200 ml pack size could become unviable at higher price levels. Besides, volume growth is likely to be slower at the new prices. The soft drink industry is believed to have grown by 15-20 per cent in volume terms during the first half of this year.