Trump aluminium tariffs may mean Coca-Cola uses more PET, CEO says

Coca-Cola Co. may have to source more PET for its drinks sold in the US in the wake of President Trump’s planned tariff on steel and aluminium imports.

The US president is lining up a 25% tariff on the shipments, although the measure is not due to be introduced until early next month.

Speaking to analysts yesterday (11 February), Coca-Cola Co. chairman and CEO James Quincey was asked how the tariffs might affect the Sprite maker’s costs.

Quincey sought to underline how the tariff would be “predominantly an impact in the North American business” but said: “If one package suffers some increase in input costs, we continue to have other packaging offerings that will allow us to compete in the affordability space.”

In December, Coca-Cola, criticised in recent years for the blight of plastic pollution worldwide, changed environmental targets it has on packaging.

On the call with analysts, Quincey added: “For example, if aluminium cans become more expensive, we can put more emphasis on PET bottles, et cetera, et cetera. We will adapt the packaging strategy in function of changes in the relative input costs of what goes into that.”

The Coca-Cola chief executive was asked to quantify how much the company might have to change its use of packaging mix in the event of Trump’s tariffs coming into effect.

“Look, I think we are in danger of exaggerating the impact of the 25% increase in the aluminum price relative to the total [Coca-Cola] system,” Quincey replied. “It is not insignificant but it is not going to radically change a multi-billion-dollar US business.

“Packaging is a small component of the total cost structure. It’s not a multi-billion-dollar problem relative to the input cost. It is a much more manageable number. Between mitigation of supply chain, sourcing, weights of the cans, price increase of the cans at some level potentially, switch to the PET, it’s a manageable problem in the context of the total US business.”

In 2024, Coca-Cola generated net revenue of $47.1bn, up 3% on a year earlier. On an organic basis, revenues grew 12%.

The company’s operating income fell 12% to $9.99bn amid pressure from exchange rates. Coca-Cola said its “comparable-currency-neutral operating income” grew 16%. Net income dipped 1% to $10.63bn.

Coca-Cola is forecasting its organic revenue will grow 5-6% in 2025.

Just Drinks