One of Sri Lanka’s leading conglomerates – John Keells Holdings PLC (JKH) that has a larger market share in Carbonate Soft Drinks (CSD) market in the country, in their latest quarterly review highlights that group’s Consumer Foods industry profits before taxes fell by 46% compared to a year earlier on account of the Beverages business which recorded a volume decline of 37%, due to the implementation of a sugar tax from November 2017.
The tax had resulted in substantial price increases across the industry, whilst the JKH group’s Consumer Foods industry group recorded a Profit Before Tax (PBT) of Rs.339 million in the first quarter of 2018/19 is a decrease of 46 per cent over the first quarter of the previous financial year that was Rs.627 million.
However JKH group notes that as a part of their continuing strategy to reduce and replace calorific sugar content in the carbonated soft drinks (CSD), the “GO Sugar Free” range was launched during the quarter under review. Accordingly the sugar free CSD variants currently accounts for approximately 23% of total beverage volumes. The group also notes that on furtherance of the Beverage business’ strategy to diversify its portfolio to create a more balanced mix of CSD and non-CSD variants, the business launched dairy and water products in April and June 2018 respectively. The dairy range, launched in Vanilla, Chocolate and Strawberry flavours under the “Elephant House” brand has been very well received.