Pripps Ringnes has signed an agreement with PepsiCo concerning the production, distribution and sale of PepsiCo`s carbonated soft drink products in Norway. On 27 April 1998, Pripps Ringnes will be taking over the market region currently covered by Lerum Fabrikker. The agreement is for 20 years with an extension option for a further five years.
In addition to this agreement it is also expected that Pripps Ringnes will take over the responsibility for the remaining parts of Norway, when PepsiCo`s agreements with their existing bottlers expire.
Pripps Ringnes has entered into an agreement whereby it will tollfill a large proportion of Pepsi volumes in 1998 and some volumes at the beginning of 1999 at Lerum Fabrikker.
Sales of PepsiCo products in Norway last year totalled some 60 million litres. Lerum`s volumes accounted for approximately 70% of this. Pripps Ringnes believes there is potential for a significant increase in volumes in the years to come. In the short term, however, the agreement will have a slight negative impact on profit due to start-up costs in connection with marketing and distribution. In the longer term, the agreement is expected to have a favourable effect on Pripps Ringnes` profit.