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Soft drink majors to help with Bahrain price probe

Manama, January 17, 2010

Soft drink giants Coca Cola and Pepsi have agreed to fully co-operate and share necessary details with the Bahrain government to prove their recent price hike is inevitable.

Industry and Commerce ministry has instructed both companies to submit their financial accounts for study after Minister Dr Hassan Fakhro announced on Thursday that the reason behind the decision to raise their prices by 50 per cent will be studied.

The increase has brought the prices of all carbonated soft drinks produced by the firms to 150 fils, up from 100 fils.

The ministry said that although company representatives outlined the reasons behind the rise, the ministry insisted on checking the producers' accounts.

The ministry will also follow the price trends of soft drinks in the region, particularly in GCC markets.

Coca-Cola Middle East public affairs and communications manager Antoine Tayyar said they were co-operating with the Ministry who they believe will take into consideration the reasons behind the price change as an 'adjustment'.

'For more than 20 years, the price has not changed but we believe it is now time for this price correction in Bahrain and in other GCC countries,' he said.

'Our raw material costs and operating expenses has increased.

'For example, there has been a rise of 167pc in sugar prices and 188pc increase in operating expenses over the last 10 years, which makes it impossible to hold our prices at the same level.

'Our goal is to continue to provide a world-class product to our consumers with the same high quality every time they consume any of our products.'

Meanwhile, Pepsi bottler Ahmadi Industries general manager Ali Ahmadi assured that Pepsi is committed to providing full co-operation to the government.

'For the past 30 years, Pepsi cans have been sold to consumers in Bahrain for 100 fils,' said Mr Ahmadi. 'We kept our prices constant, despite the escalating overheads and labour and raw materials costs.

'Over the past few years, the increasing costs have put tremendous pressure on the viability of the business, hindering our ability to grow our business and employment base.

'Meanwhile, almost all other manufacturers have increased their prices.

'After exhausting all means of containing and absorbing costs internally, we are no longer able to sustain the previous prices.

'We are proud of the portfolio of Pepsi products we offer.

'We are certain that Pepsi products will continue to provide great consumer value, and that our prices will remain very competitive compared to other products or categories in the local market.

Ahmadi added that Pepsi has over 350 workers and employees in Bahrain across their bottling operations producing and marketing products including Pepsi, Mirinda, 7UP and Mountain Dew.

The GDN had earlier reported that Coca Cola and Pepsi have defended a 50 per cent increase in the price of some of their most popular drinks.

The price of the 2.25-litre 'family bottle' has also increased from 400 fils to 500 fils.-TradeArabia News Service

Tags: Bahrain | Pepsi | Coca cola | soft drinks |

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