Power shedding is leading to bottled water price hikes. A six pack of two liter bottles and 12 packs of half liter bottles have gone up by around 4 birr, according to a beverage industry insider.
But not all bottlers have raised their prices. Dominant players like Aqua Addis, Gift, Care and Top raised prices starting last week however the four companies have not raised prices consistently, as some increased prices more than others.
For instance, the increase in Aqua Addis is four birr per pack of two litter bottled water and stands at 60 birr, while others are charging 58 birr for a similar package.
“The rate of the latest increase rate is higher than the past trend,” sources close to the issue said. They added that in the past the increase was about 2 birr per pack, so the current hike is relatively higher than normal.
Representatives at the factories say the electric outages have forced them to increase prices. An individual who said they represented the Ethiopian Bottled Water and Soft Drinks Manufacturing Industries Association (EBWSDMIA) told Capital that the power shortage plays a heavy burden for the factories. They said via phone that their power cuts are more severe than the mere shedding and price hikes on raw material is another reason bottled water prices are rising.
Some disagree with this saying there is not a shortage of raw material.
Ashenafi Merid, General Manager of EBWSDMIA, told Capital that challenges in the production process could lead to price increases. He underlined the power issue as the major problem.
Not all bottled water companies are raising their prices however, even though they also face challenges from the power shedding.
“We are distributing the power just like other industries,” Melaku Taye, Public Relation Head of Ethiopian Power Utility, told Capital. “Light industries like water packaging are shedding every 24 hours. They (such kind of industries) will compensate their production when they access the power for the other 24 hours,” he added.
“If there are similar factors other factories can react and increase on their production, but we will see the others response may be in the coming weeks,” one of the sector actors told Capital.
Capital has learned that the price of raw material has not risen in the latest market. One of the manufacturers confirmed no price change on the raw material and stated; “currently the price of raw material and its supply is in a stable situation,” he explained.
The association representative argued that the production cost for using generators has increased and there is also scarcity of raw material and its price change.
The price rise has created confusion in the market, with other bottlers. Most bottled water is selling for at least 55 birr for a six pack of 2 litter bottles.
The sector expert stated a couple of months ago almost all of the factories increased their prices due to the lack of foreign currency to get the raw material properly with a suitable price.
Prices have risen sharply over the past few months. Currently there are over 80 water bottlers registered in the association and 15 new comers are getting ready to begin production.