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Pepsi cuts price, Coke yet to follow suit

April 15, 2003 15:03 IST

Heralding the cut-throat summer competition in soft drinks, Pepsi said on Tuesday that it has slashed prices of its 300 ml returnable glass bottles to Rs 6 in the capital and this price cut may be extended to other markets to make its brands more affordable.

However, Coca-Cola appears to have been caught on the wrong foot, with its 300 ml pack still priced at Rs 8.

When contacted, Sunil Gupta vice-president (external), of Coca-Cola India, told PTI, "We're making no fresh comments on our pricing strategy. Right now, our 300 ml pack continues to be priced at Rs 8."

The fresh price war, triggered by Pepsi, follows an earlier onslaught when both the companies reduced prices by about 20 per cent across the board just before the Union Budget for 2003-04, which provided them excise duty relief.

A Pepsi spokesperson said, "In a high-consumption market like Delhi, aggressive price points devolving from the 300-ml segment will work much better. Our price strategy for this market, therefore, works off this thinking. As a consequence, 200-ml bottles are priced at Rs 5. The new price points are 300 ml at Rs 6, and 200 ml at Rs 5."

According to industry sources, this sector is heavily dependent on returnable glass bottles and Pepsi's latest price reduction strategy is critical to drive volumes.

Sources said earlier this year, Coca-Cola had taken the price war head on by introducing 600-ml PET bottles priced at Rs 12 each, beginning with Maharashtra, one of Pepsi's key markets.

Pepsi, which was selling 500-ml PET bottles priced at Rs 15 each, was caught on the backfoot and was forced to react, beginning with reduction in prices of its 500 ml bottles to match that of Coke, the sources said.

Meanwhile, action may now shift to the 200-ml segment.

According to industry sources, Coke is offering Sunfill sachets priced at Rs 2 each, free with 200-ml and 300-ml bottles, in some regional markets. In effect, therefore, while

Coke's price points for 200-ml and 300-ml bottles remain at Rs 5 and Rs 8 respectively, the consumer is being offered more for less.

In the home-consumption segment too, Coca-Cola took the lead earlier this year by slashing prices of its 1.5-litre and 2-litre PET bottles.

Pepsi too reduced prices of its 1.5-litre and 2-litre PET bottles, to Rs 35 and Rs 40 respectively, against the earlier price of Rs 43 and Rs 50.

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