News Brief
Business
PepsiCo Joins The Master
PHOTO BY CFP
PepsiCo, the world’s second largest beverage company, declared a “strategic alliance” with food and beverage giant Master Kong, China’s largest domestic soft drink manufacturer.
According to a joint statement, Master Kong will exchange a 5 percent stake for ownership of PepsiCo’s China bottling plant, also acquiring a local franchise extended to all Pepsi’s sodas as well as the sports drink Gatorade. In addition to 5 percent stake in Master Kong, PepsiCo also has the right to determine whether or not to increase its indirect stake in Master Kong to 20 percent before 2015.
This alliance between China’s number two and number four beverage companies is now pending final approval from the Ministry of Commerce, but has already unnerved others in the industry.
Competitors have accused Pepsi of attempting to slash its distribution costs in order to bolster its core competitiveness as its Chinese sales continue to slump, while also claiming that Master Kong is hoping to ride on its more influential partner’s coat-tails to increase brand recognition.
January 2012
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Sep 2011 | Submitted by Brian Snelson
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