Financial impact of plain packaging on beverage industry exposed

A new report from Brand Finance has estimated that the potential loss in value to the beverage industry if plain packaging was imposed by law would amount to $293 billion.

Brand Finance analysed the impact of the policy on food and beverage brands – alcohol, confectionery, savoury, snacks and sugary drinks – and found that alcohol and sugary drinks brands would be the most vulnerable.

Coca-Cola and Pepsi are among those corporations with most value at risk; $47.3 and $43.0 billion respectively, equal to 24% and 27% of their total enterprise values.

Alarmingly, the research doesn’t take into account potential losses from price and volume changes, so the total damage to businesses affected is likely to be a lot higher.
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“To apply plain packaging in the food and drink sector would render some of the world’s most iconic brands unrecognisable, changing the look of household cupboards and supermarket shelves forever, and result in astronomical losses for the holding companies,” said David Haigh, CEO of Brand Finance.

“Predicted loss of brand contribution to companies at risk is only the tip of the iceberg. Plain packaging also means losses in the creative industries, including design and advertising services, which are heavily reliant on FMCG contracts.”