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FOREIGN TRADE: The Pepsi Culture

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Cried the Beirut Daily Star, with ob vious enthusiasm: “A new culture has invaded the Biblical land of Lebanon … the Pepsi-Cola culture.” The culture poured out of a spanking new limestone and glass bottling plant on the outskirts of Beirut at the rate of 4,000 cases a day, and was lapped up so fast that delivery trucks were mobbed by eager buyers even before they could reach stores. Lebanon’s Twefik Suleman Assaf, who had spent $650,000 on the new plant, happily esti mated that he would get his investment back in 18 months.

By invading Lebanon, Pepsi was tramping heavily on the seven-league boots of its No. 1 rival, Coca-Cola. Coke, first in the Middle Eastern market in 1945 with a plant in Cairo, cashed in because Moslems like sweet drinks, have religious restrictions against alcoholic beverages. Coke was a big seller from Cairo to Iraq when Pepsi opened a plant in Cairo, began selling all through the Middle East and Africa. Pepsi’s sales were boosted by its bigger bottle and sweeter-than-Coke taste while bright young sales specialists were shipped to the area by Pepsi President Alfred N. Steele. Now in many cities it is a nip & tuck race, although Coke still outsells Pepsi in the area. This year, on a single feast day, Egyptians guzzled some 2,000,000 bottles of Pepsi.

Last week Pepsi was set to take another big gulp out of Coke’s Mideastern market. With plants under construction in Basra and Khartoum, Pepsi has issued franchises for other plants, costing about $400,000 each, in Bahrein and Amman.

Pepsi is giving Coke plenty of competition in other foreign countries, now has some 190 franchises for bottling plants ranging from Iceland to Manila. Pepsi’s agreement with bottlers is similar to Coca-Cola’s: the bottler owns the plant, buys the concentrate from Pepsi in the U.S.

Encouraged by Pepsi’s prosperous new Latin American business, Steele last week planned to push into Brazil with plants in Sao Paulo, Porto Alegre and Rio. All of Steele’s new plants may well run up his concentrate sales abroad to equal 1.4 billion bottles annually — almost half of what Pepsi sells in the U.S.

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