ECONOMYNEXT – Coca Cola Beverages Sri Lanka Ltd said it is putting a family sized glass bottle back in the market to encourage re-usable packaging and also make it easier on the purse as the country suffers the worst currency crises in the history of its intermediate regime central bank.
The ‘Big Buddy Pack’ branded 750 milliliter glass bottle is priced at 180 rupees, compared to 150 rupees for a 400lm PET bottle and 380 rupees for a 1.5 litre pack at supermarkets.
Whenever Sri Lanka’s central bank prints money to keep interest rates down operating a policy rate, collapses the currency and triggers high inflation destroying people’s real income, consumers move to smaller packs.
The so-called ‘sachet’ market was largely came into being during a period of high inflation in the 1980s as firms looked for ways for consumers to continue to access their favorite brands. The sachet market also tends to expand when the consequences of mistargeted rates hit consumers.
Sri Lanka’s rupee collapsed from 200 to 360 to the US dollar in 2022, in latest in serial currency crises since flexible (discretionary) inflation targeting with output gap targeting (stimulus) began, triggering monetary instability, critics say.
Mistarget interest rates are then compensated with depreciation (flexible exchange rate)
Annual inflation is now running at around 70 percent. Food prices which respond faster to money printing are up over 90 percent over a year.
“There is shrinkage in consumer spending and people are making choices,” Managing Director of Coca Cola (Sri Lanka and Maldives) Panjak Sinha said launching the product.
“It’s affordable in these trying times and is differentiated with a unique refillable glass bottle, paper labels and aluminum cap.
“The Big Buddy Bottle will allow consumers of Coca-Cola, especially the millennial generations who grew up enjoying Coke in glass bottles, to take a trip down memory lane and once again immerse in this unique glass bottle experience.”
Despite the latest bout of monetary instability, the firm has no plans to leave the country.
“There is a lot of resilience in the Sri Lankan market and consumers have a passion to live in the moment,” Sinha said.
“We are a solid market citizen in Sri Lanka and we will not be leaving and we will continue investing, because we are here to stay.”
The firm said it had invested 99 million US dollars in the country over a decade and has built distribution network with 80,000 plus outlets.
Coca-Cola entered Sri Lanka in 1961, with a Sri Lanka based, bottler, Pure Beverages Company Ltd, which was bought over by F&N. (Colombo/Oct21/2022)