Suntory Ltd. will become PepsiCo, Inc.’s master franchise in Japan for the next 30 years, managing all marketing, production and distribution of the American company’s soft drinks, the two companies announced Oct. 3.The move is aimed at boosting sales in Japan by forming a sales and marketing alliance, the companies said. Suntory will establish a wholly owned subsidiary to start selling Pepsi Cola, Diet Pepsi, Seven-Up and Mountain Dew in Japan as early as January.Pepsi will also transfer its company-owned bottling operation in Japan to Suntory. “This alliance will provide the necessary scale and expertise to thrive through the next century,” said Craig Weatherup, chairman and CEO of Pepsi Cola Company, PepsiCo’s subsidiary in charge of drink operations.The new alliance will provide more than 360,000 vending machines in Japan, tripling Pepsi’s current vending availability, Weatherup said. While PepsiCo can utilize Suntory’s wide sales network, Suntory will be able to add the internationally known Pepsi drinks to its production lineup, the two companies said.PepsiCo started selling its products in Japan through its own subsidiary in 1958, but it has been struggling to compete with rival Coca-Cola Co., which controls the overwhelming share of the market. Coca-Cola’s sales are reportedly 10 times greater than PepsiCo’s.
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