General Cinema to Sell Its Bottling Unit to Pepsico

Facing increased competition in the soft-drink market, General Cinema Corp. said Thursday that it will sell its soft-drink bottling operation to Pepsico Inc. for $1.5 billion.

Industry analysts said the move would bring one of the country’s largest independent bottlers under Pepsi’s control, allowing the soft-drink giant to consolidate bottling operations and reduce costs.

“I think it’s good for the consumer because it will mean consistently lower prices for soft drinks,” said Roy D. Burry, a senior vice president at the Wall Street brokerage house of Kidder, Peabody & Co.

“There are too many bottlers operating at inefficient levels. If Pepsi can bring the production costs down, the competition in the industry will drive the retail price down,” Burry said.

Analysts also said the deal would bring General Cinema top dollar for the bottling operation, relieving some of the earnings and cash-flow pressure the company has felt from a decline in its movie revenues and heavy investment in retailing, confectionary and tobacco companies.

General Cinema owns about 60% of the Neiman Marcus Group, which consists of Neiman Marcus, Bergdorf Goodman and Contempo Casuals stores. It has announced plans to open 10 to 12 new Neiman Marcus stores by 1995.

General Cinema also has bought about an 18% holding in Cadbury-Schweppes PLC since 1986, said company spokesman Philip Nardone.

The company, headquartered in the Boston suburb of Chestnut Hill, owns and operates 1,359 movie screens at 318 locations throughout the United States.

Earnings from the movie operations declined about 5% despite a slight rise in box office revenues in the fiscal year ended Oct. 31, Nardone said.

General Cinema entered the bottling business in 1968 by acquiring American Beverage Corp., which held Pepsi franchises in Miami and northern Ohio. It subsequently purchased other franchises.