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PepsiCo, Unilever Expand Partnership for Lipton Tea
POSTED: 10:05 a.m. EDT, September 15,2007
PepsiCo Inc. and Unilever NV agreed to add 11 countries to their distribution partnership for Lipton bottled tea drinks to more than double sales volume outside North America.

The accord adds eight European countries as well as South Korea, Taiwan and South Africa to the partnership, the companies said today in a statement. Sales to retailers in these countries were 300 million euros ($415.9 million) in 2006, they added.

PepsiCo and Unilever are expanding their agreement to win back consumers who have stopped drinking sugary soda amid obesity concerns. The pact will ``more than double'' the current volume of the international joint venture, they said, without being more specific.

Each company will continue to own half of the venture, which is being expanded to include the European markets of Germany, Italy, France, Netherlands, Switzerland, Austria, Belgium and Portugal.

PepsiCo, which also makes Cheetos and Lay's chips, will pay Unilever an undisclosed sum for its share of the businesses in the countries added to the partnership. The expansion will take effect in January, and the venture can also enter additional markets with ready-to-drink teas.

The partnership began in 1991 in North America, where the two companies control about 35 percent of the U.S. bottled tea market, according to data by industry journal Beverage Digest.

Coca-Cola Competition

The venture was expanded in 2003 and now covers more than 40 countries such as Russia, Poland, Turkey and Brazil. Dick Detwiler, a spokesman for PepsiCo, declined to give sales volume for the Lipton drinks.

The new accord between PepsiCo and Unilever may improve their ability to compete against Coca-Cola Co. and Nestle SA, who changed their partnership in March to give both companies more freedom to develop or buy their own tea drinks in Japan and the U.S. Coca-Cola, based in Atlanta, is the world's largest soda-maker.

Unilever is based in London and Rotterdam, and makes more than 400 brands from Dove soap to Lipton tea and Knorr soup. PepsiCo, based in Purchase, New York, is the world's second- largest soft-drink maker.

PepsiCo fell 32 cents to $69.56 at 4:01 p.m. in New York Stock Exchange composite trading. Unilever fell 20 cents to 22.60 euros in Amsterdam.

From: bloomberg
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