JEDDAH, 1 January 2008 — Soft drink companies are studying to raise the prices of their products to meet the high cost of raw materials, such as sugar, as well as the prices of aluminum cans, in addition to rise in prices of shipping, the daily Al-Watan reported on Saturday.
The head of sales of Coca-Cola Company in the western region, Mokhtar Taha, said as a first step, soft drink companies in the Kingdom intend to increase the price of 2-liter bottles.
“This decision has not been taken yet, it needs further studies and has to be decided by the company directors in a manner that will not affect the sales or the consumer,” he said, without disclosing the proposed percentage hike.
“The prices of soft drinks in Saudi Arabia are the lowest in the world,” noting that global inflation and its impact on the prices of raw materials fuelled price increases in many products,” he said.
An official of Saudi Industrial Project Company (Pepsi Cola) who requested anonymity added that the study also included proposals to reduce the can size so that prices will not be affected. He dismissed reports that the price hikes will start in early 2008, adding that the plans are still under thorough studies.
Saudi Arabia is considered one of the highest consumers of soft drinks in the Middle East, with the latest statistics indicating that the volume of soft drink sales in the Kingdom reached more than SR3.3 billion, with an average consumption of more than 5 billion cans per year.
Saudi Arabian Monetary Agency (SAMA) reported that the dollar weakness this year helped to raise the cost of food and drinks by 6.5 percent in the third quarter, while rents jumped to 9.5 percent.
