Red Star Capital Bureau news on May 19, Coca-Cola in 2022 from 3 yuan into the 3.5 yuan era, the price has risen again.

Recently, a number of terminals of Coca-Cola have carried out different degrees of price increases, convenience stores, small supermarkets and different supermarkets cola prices are slightly different.

Taking the most common 500ml plastic bottle of Coca-Cola as an example, the Red Star Capital Bureau visited and found that the specifications of Coca-Cola and Pepsi were 3.8 yuan/bottle in a chain convenience store in Chengdu, and the cashier said that the price increase began this year. In the Red flag chain and Yonghui supermarket, the price of this specification of Coca-Cola is 3.5 yuan/bottle, and the cashier said that it will rise to 3.5 yuan this year. In more scattered street shops and restaurants, the price ranges from 3 yuan to 4 yuan per bottle, and one restaurant owner said the price rose to 4 yuan last year.

In order to eliminate the impact of price differences between different sales channels, Red Star Capital Bureau compared the price of Coca-Cola's flagship store on Tmall with that of its own stores on JD.com. It found that 24 bottles of the same specifications were priced at 59.9 yuan, or 2.5 yuan per bottle, on the JD store of Coca-Cola China, but the specifications were not found on Taobao platform. According to the price comparison software, the price of various specifications of Coca-Cola products in the flagship store of Jingdong platform rose relatively on May 19.

In the distribution channel, a buyer in Sichuan told Red Star Capital Bureau that the Coca-Cola factory raised its price last month, and the delivery price of 24 bottles of 300ML of Coca-Cola increased by 4 yuan.

Red Star Capital Bureau noted that in February this year, Coca-Cola said that 2023 will further raise its commodity prices "globally", but the rate of increase will be slower. Inquiries from Red Star to Coca-Cola China and its Chinese bottlers Swire Coke and CoFCO Coke about the price increase have not been answered as of press time. People close to Cofco Cola said they had not received any notice of price increases.

Although the price of 500ml plastic bottles of Coca-Cola has not broken 3 yuan, but considering that an important scene of carbonated drinks is to buy and drink on the street, 3 yuan/bottle of Coca-Cola, I do not know how long it can be sold.

Low price and stable price all the year round is one of the important competitiveness of Coca-Cola. Since its return to the Chinese market in 1979, the price of Coca-Cola products has not risen significantly for more than 40 years. From 1990 to 2019, Coca-Cola's unit price grew at a compound rate of 0.42 percent, according to a report by Guosheng Securities.

In April 2021, Coca-Cola CEO JamesQuincey said that Coca-Cola will raise beverage prices to cope with the impact of rising commodity costs, and intends to adjust package sizes to really optimize price points for consumers. "We have a good hedge in '21, But because of the growing economic pressure in '22, there has to be some price increases."

This round of price increases is weighing on Coca-Cola's results. According to the financial report for 2022, Coca-Cola's revenue in 2022 was 43.04 billion US dollars, an increase of 11%; Operating profit of $10.909 billion, up 6%, with global unit case volume up 5%. As for the "price/portfolio growth" mentioned in the earnings report, its global price grew 11 percent in 2022 and 12 percent in Q4.

About the new round of price increases that may be launched this time, is it due to the shortage of acacia gum, one of the raw materials of cola? According to the Shanghai View News, in May 2023, due to armed conflict, the market is worried about whether Sudan, which is rich in acacia, can continue to supply the key material of this carbonated beverage. Will the tight supply of acacia affect the production and supply of common carbonated beverage products in the market? Both Coca-Cola China and PepsiCo said they were unable to respond at this time.

Chengdu Economic Daily - Red Star News Reporter Yu Yao

Cheng Luyang

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