Prices of soft drinks are on the rise as the industry continues to grapple with the fallout from macroeconomic headwinds induced by the drop in oil price.
Nigerian Bottling Company (NBC), the biggest soft drinks maker in Nigeria and bottler of the famed Coca-Cola brand have raised its prices across the board as it continues to battle macroeconomic challenges such as continued naira devaluation, inflation and higher input cost of imported raw materials.
Beverage Industry News (BIN) can authoritatively confirm that the giant soft drink maker has increased its prices to wholesalers across the country for its various brands early in January with the exception of its Eva bottled water whose price has remained the same. Also, the company has quietly withdrawn the 60cl PET bottle it introduced in February 2016 for the standard 50cl PET.
To show the rate of increase, a crate of Coca-Cola 35cl returnable glass bottle (RGB) which holds 24-bottles now costs N1,200, from N1,000, a 20% markup. Similarly, a crate of the company’s 50cl RGB which also contains 24-bottles of various Coke brands now costs N1,450, from N1,200, a 20.83% increase. A crate of its 50cl PET Coke pack which holds 12-plastic bottles has risen 15% to N1,150, from N1,000 per crate; and the 1.5-litre PET case of various Coke brands have jumped 27.27% or N300 to N1,400 per pack, from N1,100 before the new year. Even the Pulpy 5Alive orange juice which comes in a 12-pack 40cl PET container (6 on each side) and used to go for N1,450 per pack, now sells for N1,700 per pack wholesale.
It is worthy to note that Coca-Cola Nigeria was forced to raise prices last year following severe foreign currency shortages, inflation and subsequent naira devaluation.
In its Q3 trading update in November, Coca-Cola HBC, the parent company of Nigerian Bottling Company, said that it had adjusted its commercial plans in Nigeria to the new reality of high inflation – changing pack sizes and price points to meet consumer needs and addressing their affordability concerns.
But the price increases did not stop with Coke. The price hikes appear to be industry wide as Seven-Up Bottling Company, the second biggest producer of soft drinks in the country and bottler of Pepsi-Cola brands also notified its wholesalers as of 1st January of its new prices. Now, a 35cl RGB crate of various Seven-Up brands such as Pepsi-Cola, Mirinda, Mountain Dew, and others which used to wholesales for N1,000 per pack now costs for N1,100.
Other soft drinks, sports drinks and milk-based fruit drink producers – like Nutri-Milk by CWAY, La Casera and Smoove Chapman by La Casera Limited, Lucozade Boost and Sports drinks by Suntory Beverage & Food Nigeria Limited have all raised their prices ranging from 10% to 27% increments respectively.
This has prompted retailers of the various brands to adjust their prices upwards to reflect the new changes. A 50cl PET bottle of Coke, Fanta or Sprite that used to cost N100 now retails for N120 per bottle, while its 35cl RGB size now sells between N60 to N70 depending on retailer, from N50. Similarly, a 50cl PET of Pepsi-Cola now retails for N105; and Big Cola, the new soft drink manufacturer that entered the Nigerian market in October 2015, touting the democratization of its soft drinks at a cost of N100 per 65cl PET now sells for N110 retail.