Coca-Cola has reached an agreement with most of the 56 bottlers that sued the company after it began shipping Powerade sports drinks directly to Wal-Mart distribution centers. The warehouse deliveries
bypassed a more than century-old franchise system, under which bottlers sell directly to retail stores in their territory after purchasing concentrate from Coke.
Sandy Douglas,
president of Coca-Cola North America, says that warehouse delivery would be used only for select products at select stores. He says the model is the best way to price products competitively, get them
in front of customers in individual stores and reduce empty shelves for high-demand drinks.
It wasn't clear how far the agreement goes in defining how new distribution methods, such as
warehouse delivery, will be handled or what the bottlers will be paid when those shipments end up in stores in their franchise areas.
Tom Haynes, executive director of the Coca-Cola
Bottlers Association, says it is much better that Coke and the bottlers settled the dispute in-house rather than through the courts.
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