Shell out more for that fizzy drink: Coca-Cola, Pepsi likely to hike prices by 6-14 per cent

Coca-Cola and PepsiCo are likely to hike the prices of fizzy drinks by 6-14 per cent ahead of summer, Business Standard reported on Tuesday.

The two FMCG companies, which control over 80 per cent of the market, would be raising their prices for the first time since 2014.

According to the report, minor price changes will be made for certain shelf keeping units (SKU). The price of the 600 ml PET bottle of Coca-Cola, ThumsUp, Sprite, Pepsi and 7UP will be raised by 8.6 per cent in Delhi. The revised price of SKUs will be ₹38. For certain brands such as Mountain Dew, the price of the PET pack could be hiked by over 14 per cent, up to ₹40. The price of 2-litre bottles will be set at ₹90, an over 5 per cent price hike, while the 1.25 litre bottles are likely to be priced at ₹65, an over 8 per cent hike, according to the report.

This could affect consumption as PET bottles and cans are the preferred packaging among consumers. The companies had absorbed costs and refrained from hiking prices after the introduction of the Goods and Services Tax. However, the price of raw materials, including sugar, have almost doubled since the hike, according to the report.

The move could help the companies further absorb taxation costs and keep up with the rising prices of raw materials, to boost their profits.

Hindustan Coca-Cola Beverages Pvt Ltd (HCCB), Coca-Cola’s bottling arm, registered a net profit of ₹321 crore in fiscal 2018-19, as compared to a loss of ₹118 crore in 2017-18 and a loss of ₹233 crore in 2016-17.

It had launched smaller packs and sizes across categories, including a 100 ml Tetrapak for Maaza Refresh, and 250 ml PET packs for Minute Maid juices, according to previous reports.

PepsiCo, too, registered profits after a gap of seven years. The company divested its company-owned bottling operations in the southern and western regions to Varun Beverages Ltd in 2019.

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