KARACHI: Production of soft drinks in the first 11 months (July-May) of the previous fiscal year rose by 29 per cent compared to the year-ago period on the back of spike in demand.

The production of juices, syrups and squashes also increased by 13pc.

Sugar manufacturers must be enjoying the boom as 70pc of their total production is consumed by sectors like juices, squashes, syrups, soft drinks, biscuits, sweet and confectionery. Comparatively, the share of household consumption of sugar is 25 to 30pc.

Pakistan produced 5,550,474 tonnes of sugar in July-May FY2013-14 compared to 5,057,740 tonnes a year earlier.

In July-May, soft drinks production surged to 2.063 billion litres from 1.603bn litres in the year-ago period. Production of juices, syrups and squashes rose to 241 million litres from 214m litres.

According to official data of large-scale manufacturing (LSM), the country’s soft drinks production rose to 1.834bn litres in FY13 compared to 1.6bn litres in FY12. A total of 244m litres of juices, syrups and squashes were produced in FY13 compared to 214m litres a year earlier.

A soft drink maker said he cannot categorised the market share of consumers using soft drinks. However, he said these drinks are usually served in huge volumes in various receptions and parties, including marriage and valima functions, along with meal. In summer, it becomes one of the most sought-after items.

Carbonated beverages are quite popular across society, especially among the youth. Estimates put the industry’s revenue at around Rs185bn.

The outlook for all beverage manufacturers looks quite vibrant due to rising population and changing lifestyles, a soft drink producer said.

Coca-Cola Pakistan has planned to invest $380m in the next three years in Pakistan. A significant percentage of this investment will go towards building three new Greenfield projects in Multan, Islamabad and Karachi. The plants will be fully equipped with state-of-the-art production lines and product warehousing facilities.

Retailers’ fleecing

Despite extensive media campaign by soft drink makers regarding fixing of Rs20 for (chilled) regular bottle, consumers continue to pay Rs25 per bottle. Retailers said they charge Rs5 per bottle for chilling. But they also charge the same rate for un-chilled bottles.

Sources said retailers are openly recovering the cost of running refrigerators and deep freezers on power from the consumers. Even many retailers are also taking Rs5 extra on 1.5 litre bottle from the end users.

A bottler said the companies cannot force the retailers to sell soft drinks on companies’ suggested retail price as the retailers have their own dynamics of price enforcement.

The same regular bottle in various big hotels and restaurants is available at Rs30-50, and 1.5 litre bottle at Rs100.

Published in Dawn, August 22nd, 2014