(Yicai) May 29 -- The price of carbonated soft drinks in China will likely increase due to growing cost pressure, with industry giants Coca-Cola and Pepsi recently hiking wholesale prices, according to several insiders.

Coca-Cola increased the per bottle wholesale price of its general products by about 10 Chinese cents (1 US cent) and of its high-fiber cola by around 50 Chinese cents, Ren Hua, a beverage wholesaler in eastern Shandong province, told Yicai. Pepsi has made similar moves, Ren added.

Cola drinks and other beverages are facing pressure due to rising raw material costs. VitaVitasoy, Suntory Holdings, Pocari Sweat, Yakult, Tingyi Cayman Islands Holding, and other brands have increased prices since October 2022.

Coca-Cola and Pepsi raised prices mainly to ease pressure from growing costs, Zhu Danpeng, deputy director of Guangdong Food Safety Promotion Association, said to Yicai. Other brands will likely follow suit because the two firms' combined market share accounts for over 80 percent of China's soft drinks market, according to Zhu.

It is not surprising that Coca-Cola and Pepsi hiked wholesale prices because raw materials and operating costs, including sugar, transportation, and packaging, have climbed over the past two years, an insider from the beverage industry told Yicai. The price of sugar has been staying in historic high since early last year, he noted.

"Coca-Cola raised its wholesale prices early this year and again this month," the owner of a small retail store in Chongqing said to Yicai. "The purchase price of Pepsi has also jumped in recent days." 

However, several e-commerce platforms sell cola products at big discounts amid China's annual 618 shopping festival, while some small brick-and-mortar retail stores remain prudent about hiking prices.

"The factory price of Coca-Cola products has increased, but we haven't raised the retail price of most Coca-Cola products in our store to attract customers," the owner of a private convenience shop in Shanghai's Pudong district told Yicai.

COFCO Coca-Cola Beverages, the Atlanta-based firm's Chinese joint venture with local grain giant COFCO, has not replied to Yicai regarding rising prices yet.

Though manufacturers suggest a price increase, retailers decide the final sales prices, the beverage industry insiders pointed out. Competition in the sector has always been fierce, leading to a big difference in prices at retail stores, he added.

The share of soft drinks in Chinese grocery stores priced on average up to CNY3 (41 US cents) a bottle fell to 21 percent last year from 25 percent in 2021, while that of those priced over CNY5 a bottle climbed to 47 percent from 42 percent, according to data from NielsenIQ.

Editors: Tang Shihua, Martin Kadiev