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New enemy in the cola wars
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May 12, 1998: 8:16 p.m. ET
The British are coming, armed with a tank, a tycoon and a Virgin soda
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NEW YORK (CNNfn) - The British are joining the cola wars - and they're riding in on an army tank.
Just a week after PepsiCo Inc. dragged rival Coca-Cola Co. into court over sales at soda fountains, British tycoon Richard Branson is hitting U.S. shores with his entry in the field: Virgin Cola.
"I am so excited by the thought of Virgin Cola taking on Coke and Pepsi in their home territory," Branson said in a statement. "I have always believed that you can never truly be an international cola until you have launched in the home of the colas -- America."
Demonstrating the fire power he plans to use to win a share of the cola market, Branson rode an army tank in Times Square on Tuesday to launch his marketing campaign.
In an interview on CNNfn's "Trading Places," Branson said Virgin won't be able to match omnipresent Coke or Pepsi when it comes to volume of advertising. (202K WAV) or (202 AIF) But he doesn't seem worried.
Branson bases his confidence on several factors, among them the Virgin Group's success breaking into the airline and music industries with its companies Virgin Atlantic and Virgin Records. (274K WAV) or (274K AIF)
That, and the fact that in short order Virgin Cola has truly arrived in England. "We launched in England a couple of years ago. Last month, Virgin Cola edged ahead of Pepsi for the first time. We got 11.9 percent of the market. They got 11.2 percent . . . ," Branson said.
Blind taste tests are also adding to Virgin's arsenal. "Before coming to America, we tested a hundred thousand people with Coke, with Pepsi and Virgin Cola. The majority, with both diet and regular, went for Virgin Cola," Branson told CNNfn's Jan Hopkins.
The new cola company plans to launch in New York, Los Angeles, San Francisco, Boston, Washington and Baltimore and initially will be available through convenience stores. A national roll-out and a multimillion-dollar advertising campaign will follow.
Virgin Cola will also be going to the movies, in a big way. Said Branson, "We are going to move now into cinemas and start building . . . Virgin multiplex cinemas alongside our Virgin Megastores. And in that way . . . people will get to sample our product."
That sample, of course, will come with a price tag, one in line with the cost of a Coke or Pepsi. "We have no intention of sparking a price war and we are sure that Coke, Pepsi and the rest of the cola brands here in the United States will not be interested in a price war either," the company said.
Legal wars are another matter. PepsiCo sued Coca-Cola last week in U.S. District Court in New York, alleging that Coke was strong-arming soda-fountain operators from selling Pepsi. Coke has denied the allegations.
Branson is watching the case closely, he told CNNfn. "I think it's very important that the competition authorities listen to the slightly smaller companies (and) try to create a level playing field so that the consumer gets the benefit of choice and gets the benefit of competition. … I wish Pepsi well in that and I hope that Pepsi will not behave in the same way when we come knocking on the doors of some of the big retailers that they are in." 
-- from staff and wire reports
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