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PepsiCo, bottler break ties
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June 3, 1998: 10:02 a.m. ET
32-year franchise pact ends as bottler threatens to side with arch-rival Coke
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NEW YORK (CNNfn) - PepsiCo Inc. reportedly broke off a 32-year franchise agreement with one of its largest independent bottlers over a growing legal dispute.
The highly unusual move erupted after Central Investment Co. of Cincinnati threatened to side with Coca-Cola Co. in Pepsi's lawsuit filed in early May, the New York Times reported Wednesday.
The Purchase, N.Y.-based perennial No. 2 soft drink company sued Coca-Cola of Atlanta (KO) alleging unfair business practices. And Central Investments notified Pepsi it planned to enter into the suit as a counter-plaintiff on Coke's side unless certain demands were met, Pepsi officials said.
Central Investment officials gave PepsiCo (PEP) Chairman and Chief Executive Roger Enrico 24 hours to expand the bottler's territories in Florida and Ohio as well as increase cooperative marketing funds, Pepsi said.
"Their real aim was to force us to pay a stupendous ransom to avoid our very legitimate initiative against Coke being compromised," Enrico said in a letter to its network of 200 bottlers.
Pepsi's top officials called the move "the utmost in disloyalty."
"We don't need traitors in our family and we're not going to have them," Enrico wrote.
PepsiCo also sued Central Investment in U.S. District Court in Cincinnati.
Central Investment officials couldn't be reached for comment. 
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