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ARGENTINA: Devaluation changes plans for Coca-Cola

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Not only did Coca-Cola have to give up on its effort to maintain prices as Argentina's peso lost value last week, but the company was also forced to throw out plans to launch a new 3-litre bottle in the country.

While the peso lost 40% of its value, after newly appointed President Eduardo Duhalde unpegged the currency from the US dollar, Coca-Cola only had to hike its prices about 10%.

The company says the new 3-litre bottle, however, will not be launched until the economy appears less fragile.

"With this new reality, we don't know when we will launch," said David Lee, president of the Argentine Coca-Cola Producers Association.

The introduction of the new bottle was planned not to increase sales, but to maintain the company's leadership by offering a new product. Pilot programmes were launched a year ago in minimarkets and other small stores in parts of Buenos Aires and La Plata.  The 3-litre soft drink sold for about US$2.

Argentina makes up about 2 percent of worldwide Coca-Cola sales, bringing the company about US$600m per year in earnings.  It has been one of the markets where Coca-Cola consumption has exploded most in the past decade.  The company now controls about 53% of the soft drink market.

 


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