Before the gates increases in beer and soft drinks

Of George Lampiris

Their next moves are currently measured by sectors such as beer and soft drinks, where according to market sources increases are imminent from the beginning of 2022, as so far all players – as a result of strong competition – have managed to contain the increases derived from energy, raw materials and transportation.

The milestone in any increase for the two branches is the festive season, while any increases will come from January 1 of the new year. The balances are delicate and the question, as people with market knowledge say, is who will make the start for the rest to follow.

Typical was the report of a high-ranking executive of the beverage industry, who noted that at the moment the price of sugar is increased by 15% compared to the corresponding period, with the price per ton amounting to 500 euros.

At the same time, he noted that flavorings have risen by 20% to 25%, while the aluminum used in soft drink cans has now reached $ 3,000 per tonne, up from $ 1,500 two years ago.

The same executive stated that the beverage industries, in order to be able to effectively cope with the pressure on prices and not to pass the increases to the retail outlets, have reduced the offers to the consumer as well as other actions that give them the possibility to reduce the consequences that the whole industry is currently experiencing both in Greece and worldwide.

Change in contracts with energy providers as well

At the same time, the same person noted that the data concerning the conclusion of annual contracts with the energy providers that were in force before the crisis in the market have now changed.

More specifically, while until now there were annual contracts with the providers, since last spring many contracts started to break and now the pricing is done month by month on a metropolitan basis, where the current costs of the energy market are taken into account, so that do not damage the providers something that happened with the previous data. In fact, on each KW there is an additional “hat” for the industry at the level of 2 to 3 euros.

As far as soft drinks are concerned, as the same person pointed out, different data apply, which are observed per soft drink code.

Thus, a large industry such as Coca Cola, for example, may more easily pass increases in the soft drink of the same name, due to its very strong market share, but will be more restrained in the case of carbonated orange juice, where competition from domestic companies such as Lux, EPSA, Vikos are stronger and sales are more shared, despite the fact that the cost of orange juice due to the fact that it also contains juice, is higher.

At the same time, he pointed out that increases in the glass bottle can be more easily passed on the shelf to the consumer, in contrast to plastic bottles where industries appear more restrained, due to the wider scope of competition between industries in the plastic bottle.

Pressures in beer as well

A person with knowledge of the beer market, for his part, stated that there is pressure for production with low cost and from supermarket chains.

In this context, some in the industry to deal with the increases are currently closing prices on cartons and when they need to spend increases move as follows: give for example as a retail supply two months with the old price and from there on pass the revaluation in order to mitigate the market impact.

The same person, however, pointed out that the demand at the moment is not to pass increases in the market, since in no case, as he mentioned, the situation can be similar in terms of prices, with last December.

He stressed, however, that the aim is to keep prices as high as possible before entering the market and to moderate the range of increases when they are now officially on the shelves of supermarkets and retail outlets.

Market sources, however, report that certain companies operating in the Greek market from the big players of beer and soft drinks have already tried to increase the shelves to 10%, but then retreated.