Nearly one week after Pepsi surprised consumers by raising the price of its drinks by 50 percent, the Coca-Cola Bottling Company has followed suit.
Nearly one week after Pepsi surprised consumers by raising the price of its drinks by 50 percent, the Coca-Cola Bottling Company has followed suit.
Notices began appearing in neighborhood shops and large supermarkets on Tuesday, warning shoppers that the price of a can of Coca-Cola has now increased from SR1 to SR1.50.
“We have raised our prices because we can no longer afford to shoulder the increasing cost of ingredients and raw materials,” said Sami Kobe, pre-sales manager at Coca-Cola Bottling Company’s Riyadh office.
“The prices of ingredients including sugar and packaging materials such as plastic and glass have risen dramatically over the past year. This is why we can no longer keep the price at SR1,” said Kobe, adding that the price has remained astonishingly stable for nearly four decades.
He also explained that competition also has some leverage in the decision to raise prices. “The leader in the Kingdom in terms of soft drink sales is Pepsi so when the leader makes a change, all of its competitors should change as well to keep the market competitive,” he said.
When asked if he knew about the Ministry of Commerce’s call to soft drink manufacturers to hold off raising prices, Kobe said, “We have not been questioned about the price increase.”
Asked if cost-conscience shoppers might have switched from Pepsi to Coca-Cola due to the price increase and that keeping their prices stable could have been in their best interest, Kobe replied: “We have known for a few months now that Pepsi was planning on raising prices and have studied the feasibility of matching the price rise. We found that even if we had not increased prices and had caused a shift in some customers to purchase our product versus Pepsi this would only be short term and would not have contributed to allowing us to continue such a discount economically in the long run.”
Commenting that he had heard that the Ministry of Commerce is trying to intervene, he said, “If the ministry demands that prices return to their previous level then we would have no choice but to comply with this request but for now it is just a wait-and-see situation.” (via arabnews.com)
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