Retailing, Franchising, and Consumerism Business Intelligence in China

Beverage Prices Rise By 10-20% In China

Hong Kong Economic Journal reports that because of the price increases in raw materials, after Wahaha added 10% to the price for its dairy beverages, many other beverage companies also now plan to raise the price of their products and some of them will increase by 20%.

From January 1, 2008, Nestle reportedly raised the price of some coffee, dairy and chocolate products by 10%. This has been one of its largest price hikes since its entry into China in the 1980s.

In Shanghai, it is the first extensive price surge for beverages in the past three years. A representative from Wal-Mart Shanghai says from the end of November 2007, they have been receiving price increase notices from beverage suppliers. Around January 1, 2008, Wahaha, Pepsi, Fanta, Marinda, Master Kong and Uni-president increased some of their products' prices. The rise has been about 10%, which is RMB0.3-0.5 for each bottle. The same increases have been seen in Beijing.

The price increase of alcoholic beverages has been the greatest. Famous brands, such as Moutai, Wuliangye and Luzhou Laojiao, all raised the prices of their products by as much as a few hundred yuan. A high-level representative from a Sichuan alcohol company says compared with 2006, the price of sorghum increased 13% in 2007 and the price of wheat increased 17%. In addition, the costs of coal and transportation also increased.

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