Difficult negotiations between The Coca-Cola Company and Pripps Ringnes
On 19 June 1996, Pripps Ringnes and The Coca-Cola Company (TCCC) entered into a letter of intent concerning the winding up of their cooperation in Norway and Sweden. Under the terms of this agreement, cooperation in its current form was to cease on 28 February 1997 but Pripps Ringnes was to be responsible for the production of Coca-Cola products until the end of 1998. The parties have subsequently agreed to extend cooperation on sales and distribution in Norway until 1 May 1997.
Under the letter of intent, a final agreement was to be signed after further negotiations on
details had been completed. The negotiations on details have been difficult and it now appears clear that the parties will not reach agreement on finalising the negotiations on the basis of the letter of intent. However, negotiations on adequate agreements concerning the winding up of cooperation in Norway and Sweden are continuing.
Pripps Ringnes is negotiating with a view to finalising the negotiations as far as possible as originally intended. Should it nevertheless prove impossible to achieve a satisfactory solution, cooperation between the parties will be based on the agreements that existed before the above-mentioned letter of intent was entered into. Since TCCC has cancelled AB Pripps Bryggeriers' (Pripps) contract for the Swedish market, Pripps' rights under the agreement will in this case expire as of 1 April 1997 and from the same date TCCC will assume responsibility for its products on the Swedish market. Pripps has previously stated that the company disputes TCCC's legal right to cancel the agreement in Sweden, and Pripps will as a consequence of a cancellation bring a claim for compensation against TCCC=2E
If there should be a breakdown in negotiations, Ringnes will continue to bottle, distribute and sell TCCC products in Norway, since the agreement with TCCC on this point does not expire until 31 December 1999.
Pripps Ringnes' 1995 accounts included a provision of SEK 200 million to cover necessary restructuring costs in connection with a possible winding up of cooperation with TCCC in Sweden. This provision is still considered to be adequate.
Lisbeth Lindberg, Director Information and Investor Relations, Tel.: +47 22 50 10 80
Halvor Stenstadvold, Executive V.-President, Tel.: +47 22 50 10 80
Paul Bergqvist, CEO Pripps Ringnes, Tel.: +46 8-757-7222
25 November 1996