Wednesday, February 17, 2010

How the market works in Dubai

Pepsi, Coke prices in UAE likely to increase

Why on earth is the government of UAE involved in this at all?? Are they scared of fizzy drink riots in the streets if the price of Pepsi and Coke gets too high??:
The Ministry of Economy will decide on a price increase request for Pepsi and Coca-Cola products by the end of next week, a top official said.

"We have received the request from both companies and we will send it to the higher committee of consumer protection for approval," Ahmad Abdul Aziz Al Shehi, director-general of the Ministry of Economy (MoE) told Gulf News in a recent interview.

Though the two companies have not stated the price yet, Al Shehi said that if approved, the increase would be less than 100 per cent.

So, as the current price of a regular can is Dh1, its new price would be under Dh2.

In all GCC countries except the UAE and Qatar, Pepsi and Coca-Cola prices have increased. While the proposal for an increase was given a year ago, the situation has changed and the companies have a better argument at this point, Al Shehi said.

Al Ahlia Gulf Line, manufacturer and distributor of Coca-Cola products in the UAE, said that it had several meetings with the MoE for a price increase request.

"We have maintained our price in [the] UAE for the past 22 years but with an increase in almost all raw materials and costs involved in the manufacturing of products ...there should be now a price review," Antoine Tayyar, Public Affairs and Communications Director for The Coca-Cola Export Corporation, Middle East said in a statement.

Amazing.

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