x Abu Dhabi, UAESaturday 22 July 2017

Pepsi fizzes as it moves on from spat over cans

Pepsi sales sparkled in first quarter as sweet-toothed consumers bought more fizz, despite a high-profile spat between a local bottler and the Government.

Along with its major competitor, Coca-Cola, Dubai Refreshments increased the price of a can of Pepsi from Dh1 to Dh1.50 in January last year. Jeffrey E Biteng / The National
Along with its major competitor, Coca-Cola, Dubai Refreshments increased the price of a can of Pepsi from Dh1 to Dh1.50 in January last year. Jeffrey E Biteng / The National

Pepsi sales sparkled in the first quarter as sweet-toothed consumers bought more fizz, despite a high-profile spat between a local bottler and the Government.

Dubai Refreshments, the bottler of Pepsi in Dubai and the Northern Emirates, grew profits 46 per cent to Dh35 million (US$9.5m) in the first quarter compared with the same period last year. Sales increased almost 14 per cent to Dh214m.

"Our business is growing quite substantially from a top-line point of view," said Tarek El Sakka, the general manager for Dubai Refreshments.

Dubai Refreshments and its competitor, Al Ahlia Gulf Line, the Coca-Cola distributor in the UAE, were both called in for talks with the Ministry of Economy in February accused of misleading consumers by selling smaller-sized cans in retail stores.

The controversy raged for a week and one major store, LuLu Hypermarket, cleared cans from its shelves because it thought it might be breaking the law.

Eventually, the issue was deemed a mistake and resolved with no repercussions for either bottler. Mr El Sakka said the Pepsi brand had not been affected by the confusing saga and sales to tourists, restaurants and hotels had been particularly strong.

"These things in the papers, they come and they go. As long as they come and go, they have no impact, particularly if the situation was resolved."

Dubai Refreshments is listed on the Dubai Financial Market and its shares were flat following its earnings release.

Along with its major competitor, Coca-Cola, Dubai Refreshments increased the price of a can of Pepsi from Dh1 to Dh1.50 in January last year, which helped to inflate sales in the first quarter of this year as the price change had taken some time to be implemented.

Dubai Refreshments exports to more than 40 countries around the Middle East, Africa and Afghanistan.

Mr El Sakka said sugar prices were still at high levels historically and this had stunted profits slightly.

rjones@thenational.ae