Coke v Pepsi soda wars take a twist under Trump's tariffs (2025)

Trump's tariffs have created a new factor in the long-standing cola wars.

Pepsi and Coca Cola have been rivals since the 1960's, and while the battle came close in the 1980's Coke has been the undisputed king of the soda industry since.

Now a 50-year-old decision could put Pepsi even further behind its rival.

In the 1970's Pepsi decided to make most of its concentrate - the sugary recipes that are then combined with water, bubbles and sweetener to make soda - in Ireland due to its low tax rate.

However, that decision will now spectacularly backfire as now almost all the concentrate forPepsi and Mountain Dew sold in the US will be hit by a 10 percent tariff.

Coca-Cola by contrast makes most of the concentrate for its US sales in Atlanta, Georgia and Puerto Rico, a U.S. territory.

Therefore, Coke and Sprite will be less hit by the impact of tariffs, helping to keep their prices lower.

'Ireland has long had the tax advantage—until the tariffs hit,' HSBC analyst Carlos Laboy told the Wall Street Journal.

No one could have predicted the tariffs nor how long they may last, but Pepsi clearly has a disadvantage now he explained.

However, Coca-Cola will not come out unscathed as just like Pepsi it could be hurt by the 25 percent tariff Trump imposed on aluminium imports in March.

Coca-Cola imports some of the aluminium used for its soda cans from Canada.

Prices for soda could rise as a result,Coke Chief Executive James Quincey previously admitted.

The tariffs blow comes after Pepsi lost its place as America's number two soda last year after being unseated by Dr Pepper.

Coke is still the undisputed king of the $97 billion US soda industry with more than double the market shares of any of its rivals at 19.18 percent.

Pepsi's market share is 8.31 percent, and Dr Pepper now 8.34 percent.

The Pepsi brand remains the overall No 2 soda - when taking into account the diet and zero sugar versions.

Dr Pepper, invented in 1885 by Charles Alderton in Texas, is older than Coca-Cola, which came a year later, and Pepsi, launched in 1893.

Despite coming first, Dr Pepper struggled against it rivals who pulled further away during the cola wars.

That bitter battle began in the 1960s when Pepsi launched its Pepsi Generation campaign - casting the drink as a hip alternative to Coke for younger people.

Pepsi, which also famously rolled out adverts with Michael Jackson in the 1984, never quite caught Coke. But it got very close in the 1980s as the war intensified.

And- apart from three years from 2010 when Diet Coke muscled in - regular Pepsi has held the No 2 spot sinceBeverage Digest began collecting data in 1985.

Dr Pepper has been helped by the rivalry between Coke and Pepsi - which tend to have exclusive deals with national restaurant chains so they only have one type of cola.

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