Citing the recent tariffs imposed upon aluminium and steel imports by the Trump administration, The Coca-Cola Company’s CEO James Quincey told shareholders last week that his company had no choice but to increase product prices.
Speaking on a conference call, Quincey said the price increase, though “disruptive,” is unavoidable.
“Obviously, while [customers] may understand the cost pressures that are out there on freight, on the increases in steel and aluminum and other input costs that affect the bottling system and affects some of our finished products, clearly, these conversations are difficult.”
Coca-Cola posted a net profit of US$2.3 billion in the just-ended quarter, improving year-on-year from last year’s second-quarter take of US$1.4 billion. However, the bump was not sufficient to prevent the iconic soft-drink manufacturer to pass the cost of tariffs on to the consumer.
“We had to take with our bottling partners an increase [in prices] in our sparkling beverage industry in the middle of the year, which is relatively uncommon,” Quincey said to CNBC last week. “That’s the metal steel and aluminum going up. The labor going up.”
He continued by noting that the tariffs may also do harm to the many local businesses from whom the multinational firm sources.
“We’re very focused on creating local businesses, with local factories, with local jobs, with local blue collar. Less trade and more tariffs will mean less economic growth in the end and that will affect us.”
Quincey did not state by how much his company expects to raise prices.
The Trump administration levied blanket tariffs on aluminium of 10 percent earlier this year, with full implementation on all but a handful of countries commencing on June 1. Washington, D.C. has experienced significant push-back ever since, including actions at the World Trade Organization and unilateral retaliatory tariffs from individual governments and other organizations.