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Pepsi out, Coca-Cola jacks up production in Indonesia as carbonated drink sales decline
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Carbonated drinks in plain packaging. (Shutterstock/File)
A
s the food and beverage industry faces a persistent decline in carbonated drink sales in Indonesia that is sending Pepsi out of the market, competitor Coca-Cola is expanding its operations in the country.
The famous American carbonated soft drink Pepsi will no longer be available in Indonesian stores and restaurants in the near future as its producer is to sever relations with its local partner, food giant Indofood CBP (ICBP), on Oct. 10.
In an official statement on Monday, publicly listed ICBP said its subsidiary, Anugerah Indoofood Beverage Makmur (AIBM), had decided to not renew its latest five-year agreement with PepsiCo Inc.
“AIBM and PepsiCo agreed to not extend the exclusive bottling agreement for commercial reasons,” ICBP spokesperson Gideon A. Putro said in the statement, which was published on the Indonesia Stock Exchange (IDX) website.
Under the agreement, AIBM held the exclusive rights to produce, sell and distribute all non-alcoholic drinks using PepsiCo’s brands, including Pepsi, Mirinda, 7Up and Mountain Dew.
The news about AIBM and PepsiCo discontinuing their partnership has been circulating for months and employees were reportedly informed in advance about the decision.
Indonesian Food and Beverage Producers Association (Gapmmi) chairman Adhi S. Lukman said the move was expected since sales of carbonated drinks have continued to decline in the past few years.
