Coca-Cola cuts prices, Pepsi may follow suit

Mumbai: In a move that may trigger a price war in competitive cola space, Coca-Cola has decided to reduce prices for its 200ml returnable glass bottle just in time for the summer season. The price of Coke glass bottles will be cut by a rupee or Rs 2 in select markets to a uniform Rs 8 across the country.

Its arch-rival PepsiCo may follow suit as the 200ml glass bottle segment is extremely price-sensitive and mostly sold in rural and semi-rural areas. The last time prices were cut in this segment was in 2003 when Coca-Cola introduced its affordable pricing strategy, according to which it priced its products at Rs 5. This was followed by Pepsi, only to be withdrawn later by both the companies as it hurt their profitability.

Coming at a time when most packaged consumer goods brands have increased prices, the move is being seen as one which will help brand Coke shore up its market share. “Coke as a brand has not been able to garner the same kind of volume growth when compared to its other cola brand Thums Up and rival Pepsi. The price reduction, coupled with good marketing and advertising, could help them prop up sales,” said Gautam Duggad, research analyst, Prabhudas Lilladher.