Coca Cola cuts prices selectively

NEW DELHI: Coca-Cola has cut prices of the 600 ml bottles of all its carbonated drinks by 2 to 21 in parts of Delhi and Uttar Pradesh at a time when sales growth of carbonated beverages has slowed considerably. Hindustan Coca-Cola Beverages, the bottling arm of Coca-Cola India, has also marginally increased the beverage quantity of its 2-litre PET bottles, while maintaining the price point of 55.


"We cannot comment on specific pricing instances, but generally speaking, pricing and promotional initiatives in our business is very local and is governed by the OBPPC (occasion, brand, price, pack, channel) architecture in a given local geography," a Coca-Cola spokesman said.


Beverage companies have been hit by two back-to-back quarters of single-digit growth.


While the July-September quarter witnessed single-digit growth on account of record rainfall, the October-December quarter too has been dismal because of extreme cold conditions in the North. The new pricing, which straddles Coca-Cola's beverage brands including Coke, Thums Up, Limca and Sprite, came into effect earlier this month.


Sources close to the move said the drop in prices is temporary and will be revised to the original price shortly.


Both Coca-Cola and rival PepsiCo offer such discounts from time to time to push sales in select markets as special promotional offers, a bottler said, requesting anonymity.


PepsiCo has so far maintained its prices.


"Depending on the local factors in play, our bottlers introduce various promotional initiatives in their markets and which are consistent with the long-term growth strategy of the Coca-Cola system in India," the Coke spokesman said.


Coca-Cola's price cut comes at a time when most packaged consumer products companies are talking of increasing prices, reeling under the impact of record food inflation.