Tropicana increases orange juice prices, reduces discounts

by Eric Schroeder
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CHICAGO — PepsiCo’s Tropicana Products Inc. on Tuesday said it was resetting pricing and trade strategies that will result in about a 20% increase in orange juice prices because of a significant shortage and escalating costs of oranges.

The company said it will increase U.S. customer list prices 4% to 8% on Tropicana Pure Premium and Dole Chilled Orange Juice effective Jan. 1, 2007, and reduce across the board the amount and frequency of its discounts.

Together, the price and trade spending changes will result in about a 20% increase, the company said. Tropicana last increased list prices by 10% in September.

"Tropicana has worked extremely hard the last two years to minimize the cost impact to consumers," said Eric Miller, vice-president of sales for Tropicana. "Given the world citrus supply is severely challenged and cost pressures have dramatically increased, we are once again forced to raise our prices to customers."

Last week Coca-Cola North America’s Minute Maid Business Unit increased wholesale list prices 9% to 11% on its Simply Orange and Minute Maid Premium lines and 20% to 25% for combined price increases and trade spending cuts for the Minute Maid chilled and frozen portfolio.

The U.S. Department of Agriculture on Oct. 12 forecast Florida orange production at 135 million 90-lb boxes, the lowest in 17 years and about 10 million boxes less than expected. The U.S.D.A. will issue an updated orange crop forecast Thursday.

Tropicana buys 40% of all oranges grown in Florida, the company said.

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