The prices of carbonated drinks would be increased by Coca Cola, the company announced on Wednesday, and United States President Donald Trump’s trade war was partly responsible for the move by the global confectionary company, said its CEO James Quincey.
Quincey blamed “broad based” cost increases for a price hike that is most likely during an earnings call where the company reported better-than-expected second quarter financial results.
According to a spokesperson quoted in the media, there would be some variation based on retailers for the impact of rise in wholesale prices by Coca cola on the retail price of its products – specifically carbonated drinks. But it can be expected that there would a rise in most stores in the price of a can of Coke at the checkout counter.
“That’s the freight, that’s the metals, the steel, the aluminum going up, the labor going up. So there is cost pressure, we’re having to pass that through into the marketplace”, said Quincey while speaking to the media about the price hike.
One of the reasons for the costs as cited by Quincey were the new tariffs “The tariffs on the metals, it’s one of many factors [that] caused us to go out in the middle of the year and announce the price increase, which is pretty unusual.” He also made a direct reference to the imposition of 10 per cent import tariff on aluminum that is brought in from the E.U., Canada, and Mexico in addition the imposition of a 25 per cent import tariff on steel imports.
Substantial import tariffs on Chinese goods have also been imposed by Trump as well as retaliatory tariffs being imposed on American goods by China and some of the other trade partners of the US. This is also resulting in serious impacts on farmers and ranchers which include impact on export of pork and had also brought down the costs of US soybeans.
However, some also see some very early indications that the aggressive policies and tactics of Trump could be paying off in the long term. For example, the US and the EU agreed to a gradual process of elimination of all tariffs between the two trading partners following a meeting between Trump and the European Commission President Jean-Claude Juncker last Wednesday. That pledge however excludes automobiles.
(Adapted from Fortune.com)