Magazine: Energy drink distributors chose the price war

Despite the government’s decision to impose a public health product fee (NETA), the price of energy drinks did not increase yet. Instead a fierce market competition, a price war started between the key distributors.

According to Bernadett Nagy, communications manager with Red Bull Hungary the role of promotions became even more crucial. She also told that they did not raise prices and gave an example of what happened to those who did: the volume sales of a certain brand with a large-size product on the market suffered from increasing their prices with the sum of NETA. János Gréczi, owner-managing director of Gramex 2000 Kft. told our magazine that NETA and changes in the regulation on environmental product fee made manufacturers launch new product lines. At the moment these are fighting for shelf space and this year consumers will decide whether they like them or not. Adrienn Horváth, marketing manager with BUSZESZ Zrt. is of the opinion that by offering a product at HUF 10-20 lower prices than the former promotional price, manufacturers cannot achieve stable, lasting growth. She informed us that Watt Energy did well in 2011 and according to Nielsen data it is now a stable third actor on the market. Besides meeting the new legal requirements with their existing products, Red Bull will also launch a new, limited edition 185ml format in the spring. For four years BUSZESZ Zrt. has already had an energy drink in their portfolio, the composition of which is in line with the new regulation. No wonder they decided to develop this product further and build the future of the brand on this; this spring it will also be given a new design. Gramex 2000 Kft.’s goal in 2012 is to increase volume sales among private label products and to improve the listing level of V-Power. The latter is a ‘price fighter’ product, so necessarily they modified its composition in order not to have to increase its price significantly. The price of their other product, Bio Power also augmented a bit. All three experts agreed that the market expansion may slow down or even stop this year as consumers will be increasingly focused on price-value ratio. This trend already started in 2011 and it is obvious that a possible future expansion would be impossible without an improvement in the purchasing power of consumers. It may well be that fewer new actors will appear on the market this year.