UK retail market flooded with grey market Coca Cola
The retail market in the UK has been flooded with grey market Coca Cola from Ireland
Print11 October 2013
It has been reported that a flood of grey market Coca Cola from Ireland is driving down the price of the product in the UK and is affecting the promotional strategy of Coca Cola enterprises.
The influx of product from grey markets is believed to account for approximately one third of the total volumes sold in the UK. The Grocer reports that wholesalers and agents are selling products made by Coca Cola Hellenic, the Irish bottling licence holder, into UK markets for a 20-30% discount on prices offered by CCE, which holds the British equivalent.
While the majority of the stock is ending up in discount stores which can sell the Coca Cola products for less, it is also suggested that some supermarkets and multiples are purchasing the stock to close the pricing gap with discounters and independents.
At present a 500ml bottle of Coca Cola costs 69-79p in discount stores whereas it currently costs £1.15 in Tesco and £1.19 in Sainsbury’s. This makes for a significant price difference between the store types.
Wholesalers have said that the growth of grey market products has been driven by the weak economy. The surge has seen a significant impact on pricing and promotions for CCE. Many people suggest that if CCE could have stopped the influx it would have. However now every can of coke sold in the UK that is not from CCE, is believed to be costing the company significantly.
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