CEO of Coca-Cola James Quincey said the soft drink maker will increase its prices of soda for the U.S. in 2018 due to the financial strain that the metals tariffs placed by President Donald Trump are causing and the rising costs of freight.
Quincey also told analysts that he expects the company’s increase in prices would result in both bottlers as well as retailers charging customers more, to make up for elevated costs. Nothing was specifically discussed about the amount the company would charge for its carbonated soda, nor did the CEO indicate the amount consumers might be play for each can.
A Coca-Cola representative was not able to comment on any specific increases in price, but did say the cost of one can of soda would be left up to the retailers’ discretion.
The spokesperson added that the increases in price, which involve the United States market, have taken effect already for those that are purchasing for resell at the retail level.
During an interview Quincey said that broad-based cost inflation was contributing as well to the rising costs. Quincey added that the increases taken during the middle of the year which for them is quite uncommon but was due to freight costs, metals, aluminum and steel costs increasing and labor moving up, which created a cost pressure and that eventually is pass through to the marketplace.
Over recent months, tariffs have been placed by the White House administration on imports into the U.S. One of the reasons for higher prices from Coca-Cola is the tariffs places on metal imports from China.
Quincey added that there was a slight broad based push on the different input costs which have come in and have affected the company’s as well as many other industries.
Amongst the other industries affected, are those that brew craft beer, as they are concerned about the aluminum tariffs that have forced them to also raise prices.
Just the aluminum tariffs by itself could cost this industry $347.5 million and could result in losses of over 20,000 jobs says the Beer Institute president, and he added that eventually that cost will trickle down to the consumer.
News of the rising prices at Coca-Cola comes amidst reports the company topped its sales estimates during the quarter in a large part became of its Zero Sugar and Diet offerings.