• March 23, 2006

Coca-Cola reached a settlement in a dispute with rival PepsiCo yesterday whereby Coke will drop one ad for its Powerade brand and modify another. Pepsi, which makes competing Gatorade, had sued Coke Monday--charging it with false advertising. Pepsi had accused Coke of making overheated claims about the Powerade Option line's low-calorie benefits.

"As the number two player, we want to set ourselves apart from the category, but we want to compete in the marketplace, not in the courtroom," said Gloria Garrett, vice president, hydration for Coca-Cola North America, in a statement. She added that the revised advertising "will maintain the central theme of the campaign, which is that Powerade Option has fewer calories than Gatorade."

The Powerade campaign will continue to air during coverage of the NCAA Basketball Tournament.

--David Goetzl