Retail FPI | Hard Times For Caffeine Lovers

By the end of April, food prices increased by 4.0% on an annual basis (that is, compared to April 2016) but decreased by 0.9% on a monthly basis (that is, compared to March 2017). During the last two weeks of April, onions, potatoes and tomatoes showed the biggest increase in prices by 23.2%, 13.5%, and 10.1%, respectively. In the meantime, the prices of cucumber, eggplant and greens dropped by 45.1%, 17.6% and 13.9%, respectively.

DRINKS IN THE SPOTLIGHT

While the overall y/y increase in prices was 4.0%, the gain in value was particularly noticeable for some products. Coffee is a good example, with its price increasing by 16.0% in April 2017, compared to the same month of 2016, in spite of last year’s 2.0% drop (April 2016 compared to April 2015).

One explanation for the higher coffee prices lies in the fact that Georgia is importing coffee, and its depreciated currency puts upward pressure on coffee prices. At the same time, coffee became more expensive on international markets as well, and showed a 10.3% increase on an annual basis in April.

Another drink exhibiting the same trend in prices is Coca-Cola. Last year’s price was 0.8% lower (April 2016 compared to April 2015), but this year it increased by almost 2% (April 2017 compared to April 2016).

Unlike coffee, Coca-Cola is produced in Georgia and is not imported, however, one of its major ingredients – sugar - is still imported into Georgia. Higher world price of sugar might be contributing to the increased Coca-Cola price.

Thus, the most popular caffeine containing drinks have become more expensive in April, hitting the budgets of caffeine lovers.