The two main beverage companies operating in Egypt, Pepsico and Coca Cola Egypt, have decided to increase the prices of their soft drinks. Depending on the size of the package, the increase is between LE0.25 to LE1.2 on the wholesale price. According to the new wholesale prices, a 330ml can or bottle has gone up by LE0.25 to sell at LE2.75. A two-litre bottle has gone up by LE1.2 to sell at LE7 instead of LE6.2. Ahmed Yehia, head of the foodstuffs division at the Cairo Chamber of Commerce, said that the hike was a reflection of the price increase of coca, the raw material used in manufacturing soft drinks, which is imported. He added that another reason for the new prices was the depreciation of the Egyptian pound against the dollar, making it more costly to buy imported ingredients. The exchange rate now stands at LE6.83 against the dollar. The price increase was described by Adel Girgis, regional manager of Pepsico Egypt, as a necessary step. He was quoted as saying that the soft drinks' companies had not raised their prices for a long time, despite the fact that most beverage products had become more expensive. He also said that the higher dollar exchange rate had been a driving force in deciding on the increases, along with the increasing cost of energy. The more expensive bottles do not seem to be putting off consumers, according to wholesaler Mohamed Salem. “Supermarkets and smaller shops are still asking for the same amount of goods that they used to order,” Salem said. The market would accept the increases, he said, especially as they were not too high, and he added that some retailers had already increased retail sales prices to consumers, even before the official increases by the companies. However, no one was happy about finding things becoming more expensive, he said, which “is not easy for the ordinary citizen.” Salem feared that retailers could now increase their prices further to keep profit margins from dropping. When the soft drinks companies announced the price increases a week ahead of implementation, some retailers started stockpiling the drinks so that they could sell them at a higher price later and benefit from the price difference, said Essam Al-Halawani, manager of Al-Haram Al-Sharif supermarket in Giza. However, fortunately this had not affected the availability of the products because the soft drinks factories were delivering the quantities needed. People were still buying cans of soft drinks and seemed to have accepted the new prices, he said.
