Lucio Tan to enter lower-priced softdrinks market, Consumer watch Options

[Ek-ek]

Lucio Tan to enter lower-priced softdrinks market
By Marianne V. Go
The Philippine Star 12/06/2004

Taipan Lucio Tan is set to give US softdrinks giants Coca-Cola and Pepsi Cola a run for their money with his tie-up with British softdrinks upstart Virgin Cola.

Virgin Cola would be positioned as a lower-priced alternative to the more established and pricier Coke and Pepsi.

InterBev, a Tan subsidiary, is investing about P1 billion to secure the license to manufacture Virgin Cola in the Philippines.

According to Hubert Tan, InterBev vice president for sales and marketing, the P1-billion investment would also be used for additional facilities for the Virgin Cola softdrinks line to be manufactured at Asia Brewery’s existing 100-hectare plant in Cabuyao, Laguna.

Tan disclosed that an agreement had actually been reached last April this year with the Virgin Group owned by self-made British billionaire Richard Branson.

The lower-priced softdrinks category, according to Tan, is the fastest growing segment in the softdrinks market.

Tan admitted that the Tan Group has always wanted to enter the softdrinks business, but there was no opportunity in terms of branding.

At present, the lower-priced softdrinks market is dominated by Pop Cola and includes other small players like RC Cola and Jazz.

InterBev, Tan revealed, is aiming for a 10 percent market share from the P5.5 billion Philippine softdrinks market.

Coke reportedly currently has a commanding share of 66 percent, followed surprisingly by Pop Cola with a 21 percent share, while Pepsi has only 12 percent share and one percent by RC Cola.

InterBev, Tan further disclosed, plans to introduce Virgin Cola at a competitive price of P5.5 per bottle, 50 centavos lower than Pop Cola.

Virgin Cola would be available in three flavors – regular, diet and lemon lime.

It would be initially available in Metro Manila and Southern Luzon where InterBev has actually started testing the new softdrink.

The Tan Group already manufactures several beverages including beer, fruit juices, spirits and water through Asia Brewery.

Virgin Cola was first launched in Britain in 1994.