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2 months ago
Trump’s Tariffs Disrupt the Balance in the Cola Wars (Apr 21, 2025)
The Trump administration’s newly imposed tariffs are reshaping the competitive dynamics between Coca-Cola and PepsiCo.Due to its reliance on importing key concentrate ingredients from Ireland, Pepsi is now facing an approximately 10% increase in product costs. In contrast, Coca-Cola, which sources a larger portion of its concentrate domestically within the U.S., has been able to absorb much of the tariff impact, thereby maintaining a relative pricing advantage.The tariffs are also affecting beverage packaging. With tariffs imposed on aluminum, the cost of canned beverages is expected to rise. Coca-Cola is exploring options such as shifting more production to plastic bottles to mitigate the impact.In a price-sensitive consumer market, these developments are likely to add more pressure on Pepsi’s competitiveness.Pepsi had already been losing U.S. market share for decades, and recently lost its second-place position to Dr Pepper. Although Pepsi maintains manufacturing facilities in Texas, Uruguay, and Singapore, its heavy dependence on Irish-sourced concentrate leaves it vulnerable to ongoing tariff risks.Independent bottlers are also raising concerns about rising production costs, further dimming Pepsi’s chances of reclaiming market share.[Compliance Note]All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.
