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Kofola seeks a piece of Hungary's cola market

North Moravia-based Kofola Holding has set out to grab a stake in Hungary's cola beverages market, which is traditionally dominated by well-established international brands.

The group's own cola-like caffeinated soft drink product, Kofola Original, has become a market leader in Slovakia, controlling nearly 30% of the cola-flavored soft drink market: 11.7 percentage points more than rival Coca-Cola. The beverage was first sold in 1962 in then-Czechoslovakia by pharmaceutical firm Galena. The recipe was developed to make use of caffeine that was left over from processing coffee beans. “Hungary is the latest stage of our expansion in the region,” said András Pál Bozsik, head of marketing at Kofola Zrt, the firm's Hungarian subsidiary. “I hope that within the next one or two years, 70% or 80% of Hungarian cola drink consumers will at least try Kofola Original,” he said. On May 16, Kofola started to sell its cola product through large hypermarket chains in Hungary. The first chain to offer the new soft drink brand was Cora, with Metro set to be next. The company expects to get Kofola cola into Tesco stores in the near future. “We want to tap local consumption through hypermarkets, then [we] plan to continue expansion through supermarkets, and later on, when the product is better known, through catering facilities,” Bozsik said. In the short term, the company plans to snare about 4% of market share in Hungary. Based on the current size of the Hungarian cola market, this would mean 251 million liters and about Ft 30 million ($161,000) in revenue.

The owner of Kofola cola, Czech firm Kofola a.s., is a leading producer of nonalcoholic beverages in Central and Eastern Europe. With over 1,000 employees, the company operates in the Visegrad Four countries, namely the Czech Republic, Slovakia, Poland and Hungary, and exports to additional countries. In 2002, the parent company, at that time called Santa nápoje, acquired the Kofola brand and the original cola recipe from pharmaceutical company Ivax for 215 million czech koruna ($10.2 million). The company then began to operate under the Kofola name. Within three years, the company became the market leader on both the Czech and Slovak cola drinks market. It founded its Hungarian subsidiary in 2004, but so far only the company’s Jupí brand fruit drinks have been sold in Hungary. (