Three icons form Beverage Association of Sri Lanka

By Cheranka Mendis

Three industry leading firms – Ceylon Cold Stores PLC, Coca Cola Beverages Sri Lanka Ltd., and Varun Beverages Lanka Ltd. – yesterday teamed up to form The Beverage Association of Sri Lanka (BAOSL), in order to raise the profile of the sector.

A first in the industry, the association hopes to bring in more companies engaging in the non-alcoholic beverage business as members in the future. The three represent icon brands Elephant House, Coke and Pepsi.

The companies, while continuing competition with each other in the market, will work in unity to provide a vital platform for the sector to promote its future growth.

JKH Consumer Food and Beverage Group President Jit Guneratne, who is also the Chairman of the new association, stated that the body was looking at facilitating the framing, development and dissemination of best practices in order to continue to produce safe and healthy non-alcoholic beverages to consumers, while proactively interacting with the Government and regulatory agencies in putting in place policies that could strengthen the industry.

While the industry itself is fragmented, Rs. 20-25 billion is generated as revenue, Guneratne said. Even though there are some 20 to 30 other non-alcoholic producers and marketers within the industry, the growth between last year and this year is 10%.

With the north and east opening up, volumes have increased over the years, he acknowledged. “However, we must remember that a lot of investments went into building the sector across the island.”

Essentially an industry for local consumers, the importation of non-alcoholic beverages is less than 5% he noted, adding that the export number was also a minute figure.

“We want to bring transparency and self-regulation into the field so that the end consumer will be benefited,” he added.

The association also intends to hold discussions with the Government on how the former could perform better with the reduction of Excise Tax through the Budget. The BAOSL hopes to work with all stakeholders of the sector to ensure proper storage and quality of beverages through provision of aids such as coolers and racks.

“We want to share our ideas with the Government and understand its priorities as well. While we do have a list of topics we want to discuss with the Government, we do not want pre-empt the discussions by going into the issue now,” Guneratne said.

“We have a lot of experience in the market and bring international expertise in as well and therefore hope to do the best for the industry.”

“It is heartening to see all the beverage firms forging a common bond and uniting to form the association, which will strengthen the voice of the sector and accord the sector its due status,” Guneratne said.

“The beverage sector is a valuable employment generator with nearly 1,500 directly involved and another 3,000 indirectly involved on top of the 75,000 retailers.”

The sector has also invested heavily in technology and heavy capital and worked on improving the retail network distribution.