Campa effect? Coca-Cola plans price cut

Mumbai: Coca-Cola is planning to slash the price of its 400 ml PET bottles to Rs 20 from Rs 25 earlier, distributor sources told TOI. The revised prices are likely to be implemented in a week at least in the Southern markets of Tamil Nadu, Karnataka and Kerala. Coca-Cola did not respond to queries.
“Since the company has been selling the 400 ml PET bottles for Rs 25, they cannot suddenly change the packaging of the same bottles and mark the price as Rs 20. For attracting customers, they will launch a new packaging wherein they will market the bottles as 250 ml and 150 ml free (250 ml + 150 ml free will be written on the pack) and the MRP will be Rs 20,” sources said.
The move comes amid rival Campa Cola’s aggressive market expansion with lower pricing. The Reliance Industries-owned brand has priced its packs lower by Rs 5-20, nudging global beverage giants like Coca-Cola to tweak their own pricing strategies. For instance, Campa Cola sells its 500 ml PET bottles for Rs 20 while Coca Cola’s current pricing for 400 ml is Rs 25. Campa’s 600 ml bottles are priced at Rs 30 while Coca Cola sells them for Rs 40. For the bigger 2 litre bottles, Campa has a price differential of Rs 20 when compared with Coca-Cola’s 2.25 litre bottle packs. To be sure, Coca-Cola largely sells 250 ml, 400 ml, 600ml, 1 litre and 2.25 litre pack size PET bottles through the general trade channels. For modern trade, the availability of PET bottles may vary. They push more of 750 ml and 1.25 litre PET bottles through the modern trade channel compared to 600 ml and 1 litre in general trade.
However, distributors of Coca-Cola are concerned as they are sitting on considerable stock of 250 ml bottles which are priced at Rs 20 and they will need to clear them out before the repackaged 400 ml bottles with reduced prices hit the markets. It is not clear as to what will be Coca-Cola’s pricing and marketing strategy for the 250 ml bottles going ahead. “The 250 ml stock will need to be liquidated,” distributors said.