BENGALURU: Coca-Cola Co said on Tuesday it would raise soda prices further in 2023 to combat stubbornly high costs, in sharp contrast to a halt at rival PepsiCo Inc, as the beverage giants bet on different paths to boost sales for the year.

Coca-Cola also forecast annual profit growth above Wall Street expectations, while PepsiCo had delivered a more somber forecast last week.

A near duopoly in the global carbonated drinks market has made it relatively easy for the companies to undertake multiple cost inflation-induced price hikes over the last year without demand drying up.

Coca-Cola Chief Executive James Quincey said the company would continue raising prices “across the world” this year, but at a moderating pace.

Analysts said Coca-Cola’s brand strength gives it the power to set prices in its category at levels above competitors.

“(Coca-Cola) would certainly be a price leader in carbonated soft drinks. They have the capacity to take pricing,” Wedbush Securities analyst Gerald Pascarelli said.

He added Coca-Cola’s strategy last year of relying less on price increases to drive sales compared to its main rival also gives it more room to raise rates without losing competitiveness.

Coca-Cola’s average selling price rose 11% for the full year ended Dec. 31, while PepsiCo’s increased 14%.

Unit case volumes for Coca-Cola fell 1% in the quarter, hit by a drop in demand in Europe, where higher fuel and power costs have sparked a cost-of-living crisis.

Quincey said consumer demand in the region is likely to remain weak for the rest of 2023.

Coca-Cola forecast annual adjusted earnings per share to rise 4% to 5%, above estimates of 3% growth, according to Refinitiv IBES data.

Adjusted fourth-quarter profit came in line at 45 cents per share, the first time in three years the company failed to beat expectations.