Lotte Chilsung Beverage said on the 23rd it will raise the ex-factory prices of 44 beverages, including flagship Chilsung Cider as well as Pepsi-Cola, Hot Six, Cantata, and Gatorade, by an average of 5.3% on the 26th. It is the first price hike in about two years since June 1, 2024. The move appears to be a response to high exchange rates driven by the Middle East war and accumulated cost pressures.
By major item, Chilsung Cider will rise about 4.3%. The carbonated soft drink Milkis will go up about 6%. The coffee drink Cantata will increase about 5.7%, Let's Be about 7.6%, and the energy drink Hot Six about 4%.
Pepsi-Cola, produced and sold using concentrate imported from U.S.-based PepsiCo, will rise about 5%, and Mountain Dew about 6.1%. The sports drink Gatorade will also be up about 6.3%. In addition, the ion beverage E-PRO Bujokhalttae will rise 6.9%, Lipton 5.9%, Ceylon Tea 5.1%, and Sol's Eye 4.4%.
This price increase appears to have been influenced by rising packaging material prices. For beverages, packaging accounts for about 50% of total materials and supplies costs. Most beverage packaging uses aluminum and naphtha-based plastics as raw materials, with a significant portion sourced overseas. On the London Metal Exchange, aluminum rose 50% from $2,440 per ton (about 3.75 million won) in May last year to $3,670 (about 5.65 million won) in May this year. Over the same period, naphtha, a key plastic feedstock, climbed 68% from $568.6 per ton (about 870,000 won) to $957.7 (about 1.47 million won) due to supply-demand instability.
In addition, Lotte Chilsung Beverage said higher exchange rates have increased import expenses for concentrates and other inputs used to produce products from U.S.-based Pepsi, and rising oil prices have also added to logistics costs.
A Lotte Chilsung Beverage official said, "The burden of production costs has intensified to the point that it is no longer possible to absorb it internally," adding, "This price adjustment is an unavoidable choice not only for improving quality and ensuring product supply but also for enhancing shareholder value, and we minimized the items and rates of increase to ease the burden on consumers."