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Will Pizza Hut Play in Moscow? Pepsico and Soviets Discussing It

Times Staff Writer

Pepsico, which began selling the first American soft drink to the Soviet Union 13 years ago, said Tuesday that it is negotiating to introduce its Pizza Hut restaurant chain there.

The proposal to open as many as 100 Pizza Huts would make the Wichita, Kan., company the first foreign restaurant operator to do business in the Soviet Union. The company said it hopes to reach a final agreement early next year and to begin construction of the first Soviet Pizza Hut later in the year.

Pizza Hut is the world’s largest pizza chain with 5,450 outlets worldwide. It operates 550 of those outlets outside the United States in 31 countries, including Japan, Mexico, Britain and Australia.

The move into the Soviet Union would be Pizza Hut’s first entry into a Communist country. Pizza, however, is not new to the Soviets, who have some pizza parlors of their own. Pepsico has been selling Pepsi-Cola to the Soviets since 1973 and operates 16 bottling plants there.

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Pepsico said it expects to develop the Pizza Hut units in the Soviet Union through a joint venture with the Soviets, who are interested in learning more about American food operations.

Representatives of the U.S. company visited Moscow and toured restaurant facilities a year ago at the invitation of Soviet officials, according to Pepsico. A similar Soviet delegation made a tour of Pizza Huts in September.

Donald M. Kendall, Pepsico’s chairman until this past spring, introduced Pepsi-Cola to the Soviet Union in 1959 at an American trade fair. In 1973, the Soviets received the technology, equipment and concentrate to make Pepsi. In return, Pepsico received the U.S. distribution rights to Stolichnaya vodka.

Last year, Pepsico renewed the pact through 1990. A spokesman said the five-year agreement is projected to represent more than $2 billion in retail sales of Pepsi-Cola in the Soviet Union and Stolichnaya vodka in the United States.

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Separately, Pizza Hut said it will purchase Straw Hat Restaurants of Dublin, Calif., from Saga Corp., which became a wholly owned subsidiary of Marriott Corp. earlier this year.

Marriott and Pizza Hut would not disclose terms of the cash deal, which includes the purchase of 198 Straw Hat Pizza outlets located mainly in California. Pizza Hut has 185 outlets in California.

Marriott also said it has reached a definitive agreement for its previously disclosed plans to sell Saga’s other restaurant operations--including Stuart Anderson’s Black Angus, Velvet Turtle, Grandy’s and Spectrum Foods restaurants--to American Restaurants Group, headed by Anwar Soliman of Newport Beach. The Spectrum Foods group includes such Southland eateries as Prego in Beverly Hills and Chianti in Los Angeles.


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