Coca-Cola Remains Popular in Russia Despite Company's Exit from Market
Date
3/20/2023 3:10:22 AM
(MENAFN) Coca-Cola remains one of the top-selling cola-flavored beverages in Russia, a year after the American company decided to quit the country's market, according to business daily RBK. The iconic drink was the second-most-popular cola beverage among Russian consumers in January and February, accounting for more than 14 percent of sales per unit. However, the top seller among cola drinks is the Dobry Cola brand, produced in Russia at factories that belonged to Coca-Cola HBC Russia, the bottler of the original drink. It accounts for just over one-third of the market.
In money terms, imported Coca-Cola ranked first among cola drinks, and topped all sweet carbonated beverages, accounting for 32 percent of sales. However, the unit price of the original Coca-Cola rose by an average of 68 percent year-on-year in the first two months of this year.
Russian retailers and fast-food chains procure the original Coca-Cola from other countries via parallel imports, a practice by which a non-counterfeit product is imported without the permission of the intellectual property owner via alternative supply channels. Russia legalized the mechanism to provide the market with goods that Western companies stopped delivering or producing in Russia due to sanctions. The iconic drink also finds its way to Russia from the Eurasian Customs Union countries such as Kazakhstan, where it is manufactured by Coca-Cola HBC.
Coca-Cola announced plans to suspend business in Russia last March, joining the exodus of Western brands amid Ukraine-related sanctions. The company operated ten factories in Russia, producing soft drinks including Fanta, Sprite, and Schweppes, along with local brands.
Despite the company's exit from the Russian market, Coca-Cola's enduring popularity in the country highlights the challenges faced by Western companies amid sanctions and geopolitical tensions. The use of parallel imports and the availability of the drink from other countries suggest that demand for Coca-Cola remains high among Russian consumers. The report also sheds light on the complex economic and political dynamics of the Russian market, where local brands and domestic producers often dominate, but foreign brands continue to hold significant appeal.
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