Prices of soft drinks to go up Rs 1-2

NEW DELHI: Prices of soft drinks and packaged water are set to go up by Rs 1-2 with immediate effect. The FM has announced an excise duty hike to 21% on aerated sugary drinks and mineral waters from the existing 18%. This will lead to prices of colas going up 1-2%, top industry officials said.

This is the second straight year when excise has gone up in the Rs 14,000-crore soft drinks industry. Last budget too, excise on fizzy drinks and water went up to 18% from the earlier 17.5%.

The move comes at a time when Coca-Cola and PepsiCo are grappling with single-digit volume growth, impacted by slowing category sales and consumers switching to healthier drinks. "The price increase is likey to negatively impact consumption specially in two- and three-tier towns and cities at a time when the firms are pushing volumes and stepping up distribution in smaller markets. The hike could be effective both on prices of glass bottles and entry-level packs of 200 ml and 300 ml and 1.5 and 2 litre bottles."