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Issue Date: Vol. 53, No. 4, April 2013, Posted On: 3/24/2013

PepsiCo Pacts To Swap Franchises With Leading Bottlers

Emily Jed
TAGS: vending, soda vending, PepsiCo, Pepsi independent bottlers, Pepsi Bottling Ventures LLC, PepsiCo-owned bottling territories, Honickman Group's Pepsi-Cola Bottling Co. of New York, Paul Finney, Al Carey, PepsiCo Americas Beverages

PURCHASE, NY -- PepsiCo and two of its leading independent bottlers have agreed to transfer certain franchise ownerships in New York, North Carolina, Idaho and Vermont. Terms of the transactions, expected to close in the second quarter of 2013, were not disclosed.

PepsiCo has agreed in principle to swap five counties of its company-owned North Carolina territory -- including Charlotte -- to Pepsi Bottling Ventures LLC in exchange for PBV's 11 counties in Vermont and 18 counties in Idaho, which are contiguous to other PepsiCo-owned bottling territories.

PBV in turn has agreed to sell its Long Island, NY, territory, including Nassau and Suffolk counties, to the Honickman Group's Pepsi-Cola Bottling Co. of New York (PCNY), which already operates in each of New York City's five boroughs -- Manhattan, the Bronx, Brooklyn, Queens and Staten Island -- and New York's Westchester County.

"This move drives operating efficiencies and improved customer service, one of our top priorities. Our strong independent bottlers will continue to play a big role in helping us do that -- especially at the local level," said Al Carey, chief executive of PepsiCo Americas Beverages. "Combining contiguous territories to build regional strength makes sense, particularly in New York and North Carolina, where the synergies are clear." The Idaho and Vermont businesses will fold into its adjacent, company-owned operations and make it simpler for the company to do business with its customers, he added.

PBV president and chief executive Paul Finney said the acquisition will allow the company to significantly expand its footprint in the Carolinas while adding scale and leveraging its operating capability across the region it serves. PBV, a joint venture between Suntory International and PepsiCo based in Raleigh, NC, is the largest privately held bottler of Pepsi-Cola products in North America, currently operating 28 bottling and distribution facilities and serving more than 9 million consumers in North Carolina, New York, Maryland, Delaware, Vermont, Virginia, Idaho and South Carolina.

"We have known for a long time that consolidating our business in New York City and Westchester County with PBV's Long Island territory would be the right move for our combined business and our customers," said PCNY chairman Harold Honickman. "Nassau and Suffolk counties provide the requisite scale for us to reinvest significantly in our make-sell-deliver capabilities and partner with PepsiCo to proudly reinvigorate our presence in the greater New York market."

The Honickman Group, headquartered in Pennsauken, NJ, is one of the nation's largest privately owned Pepsi-Cola bottlers. Companies in the group make, sell and deliver Pepsi-Cola products primarily in the New York City market and surrounding counties, as well as Gloucester, Camden and Burlington counties of southern New Jersey.

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