Suntory gains Pepsi in Japan

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TOKYO -- Japanese drinks company Suntory is to take control of Pepsi-Cola sales in Japan under a 30 year agreement with New York- based PepsiCo. The deal is effective from January 1998.

Suntory, which will acquire exclusive agent rights for the marketing, manufacturing and sales of Pepsi brands in the Japanese market, intends to expand its soft drink sales through its 2.7 billion automatic vending machines all over the country.

Suntory's soft drinks and beverages business has been growing well in Japan. With 1996 sales of $1.6bn - a 7.7% increase on the previous year - it has become the company's second biggest product category, with flagship products such as Woolong tea and the Boss brand of canned coffee. Wines and spirits is Suntory's biggest business, followed by soft drinks and beverages and then beers.

Suntory now plans to boost its soft drink sales by 30% to 240 million cases in 1998 with the Pepsi agreement. Currently, Coca-Cola has a 90% share of the Japanese cola market via sales through its 8.7 billion vending machines which are seen all over the country.

Copyright October 1997, Crain Communications Inc.

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