Dec 21, 2018 (Nikkei) - Japan's top Coca-Cola distributor plans to pass higher transport costs on to customers with its first discretionary price hike in 27 years, a move that could unleash a wave of inflation in a risk-averse industry.
Coca-Cola Bottlers Japan's recommended retail prices are expected to rise by between 6% and 10% as soon as April, starting with 1.5-liter and 2-liter bottles of soda, juice and tea.
The move by the country's largest beverage company could jolt an industry used to fighting for every drop of market share. Retailers also put strong pressure on bottlers to keep prices down.
Now, with food companies raising prices to offset higher transport and materials costs, beverage makers are coming around to the idea.
The suggested retail price of 1.5-liter Coca-Cola bottles is expected to rise to between 340 yen and 352 yen ($3.06 to $3.17) excluding tax, up from the current 320 yen. Supermarkets were selling 1.5-liter bottles for 138 yen on average in October, according to Nikkei point-of-sale data. If stores fully reflect the suggested increases, prices would go up to between 146 yen and 152 yen.
The bottling company is considering whether to raise prices for other bottle sizes.
This will mark Coca-Cola Bottlers Japan's first price hike since 1992, not counting increase in 1998 and 2014 that were driven by consumption tax rises. Soft drinks will be excluded from next October's sales tax rise to 10% from 8%.
