Coca-Cola will raise prices of beverages to cope with the impact of rising commodity prices, CEO James Quincey mentioned on CNBC on April 20.
|The plan to raise prices will help improve profits, but Coca-Cola may face the loss of a large number of consumers who are tightening spending during the Covid-19 era. Photo: AFP|
Coca-Cola said that it, along with a number of major consumer companies such as Kimberly-Clark and JM Smucker conducted a price increase. Although the plan to raise prices will help these companies’ profits increase significantly, they will face the loss of a large number of consumers who are increasingly tightening their Covid-19 spending.
“We can hold out in 2021, but by 2022, the pressure will increase and then there will be a price increase,” said CEO James Quincey. “We plan to adjust the prices accordingly, review the packaging size of products and offer the best price for consumers,” Mr. Quincey added.
Between Covid-19, Coca-Cola has shifted production to packaging larger products in order to attract customers who spend a lot of time at home or regularly shop in stores.
Before the pandemic happened, Coca-Cola and rival PepsiCo stepped up production and packaging of cans and small bottles. This is more beneficial for them but makes the selling price higher to consumers. Last week, PepsiCo executives said they hoped to return to packaging smaller products soon as the pandemic crisis subsided.
CEO James Quincey does not disclose which Coca-Cola products will raise prices. The last time the company announced a price increase was in 2018 due to the impact of the tax adjustment on aluminum under former US President Donald Trump.
Shares of Coca-Cola increased by nearly 1% in the morning session of April 20 after the company announced its business results for the first quarter of 2021. Coca-Cola’s revenue and profit ranked first among the Wall Street businesses forecasted. The Coca-Cola side said consumer demand in March returned as before the pandemic. However, Coca-Cola executives say the market recovery has been uneven.