Calin Dragan, Coca-Cola: Utility price hike will temper consumption

Calin Dragan, general manager of Coca-Cola HBC Romania & Moldova, believes the domestic market will not perform as well as it did in 2007, because of a slowdown in consumer spending. Last year, the company posted a sales volume that stood at more than one billion litres, and registered its highest growth rate of the last seven years (up 23% against 2006).
Dragan is unperturbed about this year’s possible cost increases, although he admits that one of his greatest challenges as manager is the unpredictable environment in which his company operates.
“It is important that we always keep an eye on expenditures, because the cost structure varies, given the economic realities of Romania. Utility rates have surged, salaries on the domestic market are accelerating beyond productivity, almost all costs will be higher this year,” says Calin Dragan.
Last year was a very good year for soft drinks bottlers in Romania, because of the increase in consumer spending, and due to the high temperatures registered during the summer.
“I believe 2008 will also be a good year. The market will probably not achieve the same spectacular performance as it did in 2007, because if we look at the economic realities – the costs of a lot of products have risen, and so has the price of utilities. As far as most soft drinks consumers are concerned, the utility rate hike will have more of an impact on the consumption basket than FMCG price increases will,” explains Dragan.
Coca-Cola HBC Romania is the biggest player on the domestic soft drinks market. According to ZF estimates, the company’s business exceeded 450 million euros in 2007.
“The evolution of the economic environment, which has put more money into consumers’ pockets, significantly helped us to grow on the domestic market in 2007,” Dragan adds.