Himfr Reports Beverage Industry Prices Continue to Rise

Jan 25, 2010, 10:00 ET from Himfr.com

BEIJING, Jan. 25 /PRNewswire-Asia/ -- Himfr.com, one of China's leading B2B search platforms with more than 30 B2B industry websites to its name, reports that beverage industry prices are expected to continue to rise.

Himfr analyzes that Yanjing Beer began to increase average prices of bottled beer -- a recent example of drink manufacturers taking the lead in price increases -- following on the footsteps of Moutai and Wuliangye liquor; while Coca-Cola is expected to introduce a 5% increase next month.

Whether beer, wine or soft drink, the reason for price increases is mainly due to higher production costs, primarily from increases in resources such as coal, electricity, gasoline, diesel and other energy prices, as well as transportation costs. Coca-Cola's product price rises are mainly because the price of sugar, packaging materials and raw materials, etc. have also increased.

It is understood that China's domestic sugar prices have spiraled all the way since last year, from the beginning of last year's 2,600 yuan/ton up to 6,000 yuan/ton, while the pressure on sugar prices rapidly transmitted to the downstream food processing industry, so that the costs for food enterprises have greatly increased. Therefore, some food and beverage companies are quietly increasing prices to deal with these increases.

However, another view expressed is that the price of sugar, and its effects on the industry is not that great, and increased prices have another reason.

In the marketing process, the reduction is a means of promotion, but this means in the fierce competitive environment, due to the price cuts down escalating, it becomes more difficult and expensive. Himfr said that relying on the low-margin sales of products, even if it is popular, may not be enough to bring huge profits for the enterprise.

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SOURCE Himfr.com