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Despite tax hike, soft drinks to retain fizz

With summer round the corner, increasing prices for a marginal rise of 0.5% unlikely, claim experts

BS Reporter  |  Mumbai 

Makers of soft drinks are unlikely to tinker with their price following the excise duty increase announced in the Budget.

Excise duty on aerated drinks and flavoured water has been marginally increased to 18 per cent from 17.5 per cent earlier..

Read our full coverage on Union Budget Executives at Coca-Cola said it was early days yet to make any comment on the excise duty increase and its impact. A spokesperson from PepsiCo, on the other hand, said the firm was studying the fine print and could not comment on the matter.

The Rs 13,000-crore beverage industry has been growing in mid-single digits over the last few quarters. Industry sources say with summer round the corner hiking price for a 0.5 per cent increase does not quite make sense.

Additional excise duty of five per cent on "waters", including "mineral water and aerated water containing added sugar or other sweetening matter or flavoured" has been abolished. It is unclear whether this cut would be passed on to consumers.

Mineral water makers such as Catch and Bisleri were not immediately available for comments. Coca-Cola and PepsiCo executives said they would have to look at this measure in greater detail before making a comment.

First Published: Mon, March 02 2015. 00:47 IST