COKE, Procter & Gamble revising plans to launch joint venture creating billions in sales
Wednesday, August 15th 2001, 12:00 am
By: News On 6
ATLANTA (AP) _ Coca-Cola and Procter & Gamble are scaling back their planned $4 billion joint venture that would have combined brands like Minute Maid juice and Pringles potato chips.
The companies will now focus on a smaller business to create and market new products. Coke made the announcement in a filing Tuesday with the Securities and Exchange Commission.
In February, Coke and P&G announced the venture that would result in more than $4 billion in sales. Atlanta-based Coke would contribute its Minute Maid juices, Fruitopia and Hi-C beverages, while P&G, based in Cincinnati, offered Pringles chips and Sunny Delight juice.
Coke executives were excited about tapping into Procter & Gamble's vast research on consumer products, while P&G would gain access to Coke's marketing and distribution resources.
The companies now are talking about reducing the deal to a ``partnership'' focused on research and development of new products and may still include distribution of Pringles, The Wall Street Journal reported Wednesday, citing sources close to the companies. The discussions are continuing and further changes are possible, the newspaper said.
Analysts had criticized the venture as a poor move for Coke, which risked saddling its growing Minute Maid juices with Pringles and Sunny Delight, brands which haven't fared as well.
``I think Coke is taking a long, long, hard look at the deal that envisioned a combination of Minute Maid, Sunny Delight and Pringles, and I think that's smart,'' said John Sicher, editor of Beverage Digest.