Price hike for soft drinks

BOTTLING COSTS UP

DRINKS giant Coca-Cola will hike up prices for its portfolio of soft drinks this year to cope with rising inflationary pressures within its bottling business.

It comes as Coca-Cola Asia Pacific, the business unit that once made up Coca-Cola Amatil and was sold in a $9.8bn takeover to bottler Coca-Cola Europacific Partners in 2021, recorded a 15.5 per cent increase in sales in Australia last year.

The growth was led by a shift to premium soft drink products and boosted by trading in the suburbs, driven by the continued trend of working from home.

Sales of Coca-Cola, Fanta, Sprite and Monster Energy through the supermarkets have remained strong even as Covid-19 lockdowns and travel restrictions disappeared – which should see volumes once again switch back to venues such as restaurants, cafes and sporting events.

But the new “hybrid economy” that has seen many Australians work from home a few days a week is forging new sales patterns.

And in any consumer downturn generated by steeper mortgage payments and cost of living pressures soft drinks such as Coca-Cola should continue to trade strongly, with the beverage industry somewhat immune to pullbacks in spending.

Peter West, general manager for Coca-Cola Europacific Partners’ Australia, Pacific and Indonesia business unit, said the bottler was facing pricing pressures across a range of business inputs and would need to lift prices this year, following an earlier price rise 2022.

“Some moderate price changes have been planned for the year. I can’t go into details but there will be a moderate price increase, but we are also super sensitive to inflationary pressure and we see our products as representing good value and we certainly take that into account,” Mr West said.

Coca-Cola Europacific Partners took one price rise early in 2022, Mr West said, while many of its competitors had pushed through two price lifts in the region last year.

“I would say in general we are finding an inflationary environment on all of our materials. We’ve not seen the bottom of anything yet so we just continue to see inflationary periods but we do have the benefit of the mix of what we’re selling,” he said.