Drinks giants could be forced to re-label UAE cans

PepsiCo and Coca-Cola could be forced to change the packaging on their drinks cans to avoid any further violation of regulations after cans intended for export and sales in hotels were distributed to retail outlets.

Representatives of both drinks companies on Sunday met with officials from Sharjah and Dubai after they were ordered to remove all 300ml cans from retail outlets or face severe fines.

“Possible collaboration between suppliers and departments of economic development in the UAE is a solution whereby a sentence like ‘for export only’ can be printed on 300ml cans,” Khalifa Misbah Al Ketbi, of the Sharjah Department of Economic Development, said in an emailed statement.

“It will give authorities better control over the markets and ensure that product meant for exports are not diverted to local retailers and department stores,” he added.

Consumer watchdogs last week accused PepsiCo and Coca-Cola of reducing the size of their AED1.5 cans from 355ml to 300ml and removing the price tag without permission.

Some cans destined for export may have been leaked to retail outlets, a statement from the Department of Economic Development said.

Authorities on Sunday confirmed 355ml cans can only be sold in hotels. “Hotels rely on international standards and their pricing is also different from other outlets that are not subject to the ten percent municipality fees as in the case of hotels,” said Omar Bushahab of Consumer Protection division.

Cola-Cola and PepsiCo in January raised the price of their products in the UAE for the first time in more than 20 years. Both companies cited inflation, rising petrol and salary costs and a steep rise in sugar prices as reasons for the increase.

Earlier this month, PepsiCo announced it was planning to cut 8,700 jobs in 30 countries in a bid to save an extra $1.5bn over the next three years and compete with its larger rival.

PepsiCo, which owns nineteen global brands including Gatorade, Tropicana, Aquafina and Lay’s, said revenue in the fourth quarter of 2011 increased 16 percent in the Asia, the Middle East and Africa (AMEA), with double digit snacks volume growth in the Middle East.