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Coca-Cola joins Pepsi in huge price hike

Coca-Cola joins Pepsi in huge price hike

Increases of 50 percent on some lines as raw material cost finally catches up with consumers. But are hikes justified?

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December 31, 2010 12:29 by



Coca-Cola will be hiking its prices by as much as 50 percent from next week. The move coincides with a similar mark-up by Pepsi Cola, announced this week and reported in the Khaleej Times.

Khaleej Times reports that Dubai Refreshments Company (DRC), Pepsi’s distributor for Dubai and the Northern Emirates, sent a letter to customers on December 27 informing them that prices would be rising. According to the paper, the price of a 355ml can will go up by 50 percent to AED 1.50, and the retail price of a 2.25 litre bottle will go up by 25 percent or AED 1 to AED 5.

Now Kipp has learned that Coca-Cola has also planned a rise. A source with one of the major retailers tells us that Al Ahlia Gulf Line, manufacturer and distributor of Coca-Cola products in the UAE, issued letters at the same time as DRC confirming similar rises.

The moves are not unexpected. Earlier this year Gulf News reported that the two companies had applied to the Ministry of Economy requesting permission for a price rise. Back in February, Antoine Tayyar, Public Affairs and Communications Director for The Coca-Cola Export Corporation, Middle East said, “We have maintained our price in [the] UAE for the past 22 years but with an increase in almost all raw materials and costs involved in the manufacturing of products …there should be now a price review.”

Evidently they now have approval – in the letters from both DRC and Al Ahlia Gulf Line the companies confirm they have permission.

In its letter to customers Coca-Cola says, “The current economic situation and ever increasing manufacturing, selling and distribution costs have significantly impacted our business.” And in its article this week, Khaleej Times quotes the letter sent by DRC to customers. It says, “After exhausting all viable means to absorb the incremental cost of raw material, manufacturing and distribution for the longest period possible, it is no longer economically feasible to keep our current pricing structure.”

According to our information, the Ministry of Economy has insisted that cans and bottles sold in retail outlets will have the new price displayed on packaging, so that consumers know the hikes are coming from Coca-Cola and Pepsi, rather than each retailer.



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4 Comments

  1. Ofiroz on January 2, 2011 10:36 am

    Pepsi and Coca Cola has no vitamin or mineral value at all, but harmful for men, there fore it’s price hike likely to make some people to quite this dangerous habit of fizzy drinks (I hope so). I was a regular Cola consumer once up on a time, to the extend I used to drink water less and cola more.
    When I got Gout Attack (driven by too much of a Uric Acid in the blood) I forced to stop drinking Cola. Now my fridge is filled with plain club soda as a substitute for cola!

     
  2. Andrew on January 2, 2011 2:25 pm

    If Ofiroz is anything to go by, some of the harmful effects are sadly irreversible.

     
  3. Mat on January 5, 2011 8:02 pm

    I WONDER WHY a SUPERMARKET IN ABU DHABI IS INCREASING EVEN THE CANS OF SODA WATER AS SAME AS COKE AND PEPSI. IN THIS ARTICLE THEY TALK ABOUT SUGAR AND OIL PRICES INCREASED, BUT AS FAR AS THE HUMANITY ALL KNOWS, WELL, IN SODA WATER THERE IS NO SUGAR NOR OIL. that SUPERMARKET SHOULD PUT DOWN AGAIN THE PRICES OF SODA WATER I SUPPOSE…

     
  4. Andrew on January 6, 2011 12:35 pm

    … and then there are some which probably needed no extra help at all.

     

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