December 14, 2009 / 7:28 PM / 9 years ago

Coke says 'totally committed' to franchise model

NEW YORK, Dec 14 (Reuters) - Coca-Cola Co (KO.N) will stay “totally committed” to its franchise business model, the top soft-drink maker’s chief executive, Muhtar Kent, said on Monday.

The comments come amid intense speculation that Coke might have to move away from its franchise business model — in which it sells drink concentrate to separate bottlers — after archrival PepsiCo PEP.N decided to buy its two largest bottlers in a $7.8 billion deal to cut costs.

“There is no one size that fits all,” Kent told top industry executives and reporters on Monday at the Beverage Digest conference in New York.

Though he sees room for improvement in the current model, he insisted there is “no need for a vertically integrated system.”

Competition in the sagging U.S. market has heightened after No. 2 soft drink maker PepsiCo recently agreed to buy Pepsi Bottling Group Inc PBG.N and PepsiAmericas Inc PAS.N after a decade of operating as separate companies.

Coke bottlers include Coca-Cola Enterprises CCE.N, in which Coca-Cola Co owns a stake of 35 percent. (Reporting by Dhanya Skariachan, editing by Matthew Lewis)

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