Rising production costs and high inflation hit Coca-Cola. The company announced that it would be forced to raise the price of drinks. Currently in Poland you have to pay about PLN 12 for a two-liter drink.
Bad news for Coca-Cola fans. The company said that due to the release of results for the fourth quarter of last year, it will be forced to increase the price of drinks. The solution is to apply to all markets. The reason is the growth of production costs and inflation.
Coca-Cola raises prices. The management of the company commented
Reuters notes that Coca-Cola has adopted a different strategy than its biggest competitor, Pepsi. The company assures that “most of the increases are already over.”
Coca-Cola CEO James Quincy said the company will raise prices “worldwide” this year, but at a moderate pace. Quincy also predicts weak consumer demand through the end of this year.
Analysts say the strength of the Coca-Cola brand gives it the ability to set prices in its category at a higher level than its competitors. According to data cited by Reuters, last year the price of Coca-Cola rose by an average of 11%, while in the case of PepsiCo, the increase was 14%. In the last quarter of 2022, Coca-Cola’s revenue increased by 7 percent. to about $10.1 billion (estimated at about $10 billion).
In Poland, a two-liter Coca-Cola currently costs about 12 zł. On average, Kowalski buys up to 57 liters of carbonated drinks a year, mostly Coca-Cola, according to Business Insider Polska. The value of the entire market is estimated at PLN 20.8 billion.
Consequences of the sugar tax
A tax on sugar, introduced two years ago, was supposed to reduce the consumption of such drinks by Poles. Its consequence was an increase in the price of sweetened drinks. We remind you that a fee is charged for each liter of the drink: a fixed fee of PLN 0.50 – for the sweetener content in an amount equal to or less than 5 g in 100 ml of drink, plus a variable fee of PLN 0.05 – for each gram over 5 g in 100 ml drink. We recently approached the Ministry of Health (initiator of the collection) with an inquiry about the impact of the sugar tax in terms of, among other things, the attitude of Poles towards sweetened drinks. The ministry emphasizes that it will be possible to talk about real effects in a few years, but indicates that a change in the trend of eating habits can be observed by changing sales volume.
– In Poland, an assessment of the composition of the same drinks before and after the introduction of the tax (198 drinks on the Warsaw market in 2020-2021) shows that after the tax, almost 63% of the drinks had a changed composition in terms of sugar or juice content. The median sugar content in carbonated drinks decreased from 8.6 g to 6.9 g/100 ml, and in non-carbonated drinks from 5.5 g to 4.8 g/100 ml. Across the entire beverage group, the number of beverages containing more than 5 g sugars/100 ml decreased (44.4% in 2021 vs. sugar content ≤5/100 ml) increased from 13% to 38% – Wprost.pl informed the Ministry of Health.
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