Coca-Cola India slashes canned drink prices

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BOMBAY -- Coca-Cola Co.'s Indian subsidiary has cut the price of its canned soft drinks by 28%, citing enthusiastic consumer demand as the reason to exploit economies of scale. However, industry observers claim poor sales prompted the move.

Bombay-based Coca-Cola India's new price for its canned Coke, Thums Up, Limca and Fanta brands, now sold for 36 cents instead of 50 cents, may force rival Pepsi to follow suit. Pepsi hasn't announced a price cut on its canned drinks, which along with the Coca-Cola versions, have yet to achieve success in a market dominated by beverages packaged in glass bottles.

"Over the last year the Indian consumer has contributed significantly to the success of our brands. We are confident that with this price we can make this attractive package available to an even more extensive base of consumers," Donald Short, newly appointed CEO and president of Coca-Cola India, said in a statement.

The marketer claims a 61.7% share of the estimated $500m Indian soft drinks market, though PepsiCo's eponymous Pepsi cola leads in that category. The poor performance of its flagship Coke drink, however, recently forced Coca-Cola to move the account to Chaitra Leo Burnett, Bombay, from McCann-Erickson, Bombay.

Copyright April 1997, Crain Communications Inc.

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