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Coca-Cola FEMSA paid 14% more for sugar and PET resin

Coca-Cola FEMSA paid on average 14% more in 2021 for its sugar and PET resin acquisitions compared to 2020.

The prices of certain raw materials, including those used in the bottling of its products, primarily PET resin, finished plastic bottles, aluminum cans, high fructose corn syrup (HFCS), and certain sweeteners, are paid or determined by reference to the US dollar and therefore local prices in a particular country may increase based on changes in applicable exchange rates.

In addition, the most significant packaging raw material costs for Coca-Cola FEMSA arise from the purchase of PET resin, the price of which is related to crude oil prices and the world supply of PET resin.

On average, the price the company paid for PET resin in US dollars in 2021 increased 13.9% compared to 2020 across all its territories.

In addition, since the high volatility of the currency has affected, the average price of PET resin in local currency was higher in all its territories.

In 2021, Coca-Cola FEMSA purchased certain raw materials in advance, negotiated and secured prices in advance, and entered into certain derivative transactions that helped the company capture opportunities with respect to raw material costs and foreign exchange rates. .

Coca-Cola FEMSA

Under its agreements with The Coca-Cola Company, the company may use raw or refined sugar, artificial sweeteners, and HFCS in its products.

Sugar prices in all countries where the company operates, except Brazil, are subject to local regulations and other barriers to market entry that, in certain countries, often make the company pay for sugar above international market prices.

In recent years, international sugar prices have experienced significant volatility. Across all of Coca-Cola FEMSA’s territories, its average price of sugar in US dollars, taking into account its financial hedging activities, increased approximately 13.8% in 2021 compared to 2020.

Historically, The Coca-Cola Company has increased prices for Coca-Cola trademark beverage concentrates in some of the countries where it operates.

For example, The Coca-Cola Company began gradually increasing concentrate prices for certain Coca-Cola trademark beverages in Mexico beginning in 2017 and continuing through 2019, followed by a subsequent increase in 2020 and 2021.

 

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