Coca-Cola Bottlers Dismiss Suit, To Test New Distribution Plans

Coca-Cola said Monday that several key Coca-Cola bottlers are dropping their lawsuits that sought to a block a new delivery system to Wal-Mart Stores.

As part of the announcement, Coca-Cola said it will work with the bottlers "to develop and test new customer service and distribution systems to supplement their powerful direct store delivery."

Bottlers participating in the initiative agreed to drop lawsuits now pending in U.S. District Court in Atlanta, and Circuit Court of Jefferson County in Birmingham, Ala., Coca-Cola said in a statement. The world's largest beverage company added that it hoped that all U.S. bottlers will participate.

Last year, several bottlers that represent roughly 10% of Coca-Cola's U.S. volume sued to try to block a new delivery system that its largest bottler, Coca-Cola Enterprises, wanted to test for the Powerade sports drink.

A major Coca-Cola customer, Bentonville, Ark.-based Wal-Mart Stores, approached the company and its bottlers last summer, saying it wanted to increase availability of its Powerade sports drinks in its stores and help the brand grow faster by delivering the product to its stores through its own warehouses rather than through the bottler system.

The test of the proposal was only being conducted in CCE's territory, but some other bottlers objected, Coke said.

"Our bottling system is our heritage, and it will be the foundation for our future growth. The partnership with our bottlers is what makes the Coca-Cola system powerful and unique, and we will work diligently to ensure that we move forward and succeed together," said J.A.M. 'Sandy' Douglas, president of Coca-Cola North America. "One of the historic strengths of our system has been its ability to change and adapt as our consumers, customers and competitors
have changed."

Under the agreement, the company will join U.S. Coca-Cola bottlers in testing various new route to market service systems to bring company products to customers who require special services.