RC Takes Fight on Coke, Pepsi Deals to Public : Ads Object to Dr Pepper, Seven-Up Acquisitions
Royal Crown Cola Co., seeking to boost its bid to block separate corporate mergers proposed by soft-drink giants Coca-Cola Co. and Pepsico, is launching a nationwide advertising campaign today encouraging consumers to oppose the mergers.
At issue are two merger plans that would concentrate 80% of the U.S. soft-drink industry in the hands of the two beverage giants. Coca-Cola has proposed a $470-million buyout of Dr Pepper, and Pepsico has announced plans to purchase Seven-Up Co. for $380 million. Both mergers are under review by the Federal Trade Commission in Washington.
Many analysts say the deals pose a key test of how far the Reagan Administration will go in allowing companies to combine as they wish.
Royal Crown argues that the mergers would reduce competition, drive independent bottlers out of business, increase prices for consumers and “and threaten the jobs of thousands of workers.”
The company has purchased full-page advertisements headlined “The Cola Wars and You,” scheduled to appear in seven major daily newspapers, including the Los Angeles Times, at a total cost of $200,000. The ads, signed by James W. Harralson, executive vice president and chief operating officer of Royal Crown, explain the company’s position and ask consumers to let him know how they “feel about this issue.”
“Soft-drink consumers would be better off if RC’s marketing programs were as aggressive and well-funded as its lobbying efforts,” countered Pepsi spokesman Jim Griffith. “The consumers’ interest is best served by a variety of top-quality products that are aggressively marketed. . . . That’s exactly what our purchase of Seven-Up is designed to produce.”
In Atlanta, a Coca-Cola spokesman said: “Our proposed acquisition of Dr Pepper does not violate antitrust law and is pro-consumer.”
Royal Crown, the sixth-largest beverage company in the United States, has been a vocal opponent of the separate mergers planned by Coke and Pepsi since the deals were announced about 4 1/2 months ago.
A spokeswoman for the FTC declined to comment on the proposed mergers, saying that it’s the agency’s policy not to discuss whether it is investigating any mergers. But spokesmen for Coke and Pepsi confirmed that the FTC, which did not seek court injunctions against any proposed corporate mergers last year, is continuing its review.