LOS ANGELES (Reuters) - PepsiCo (PEP.N) and Anheuser-Busch have agreed to jointly purchase goods and services, from computers to travel, in the United States in a move one expert called a first for large companies.
While co-ops and other purchasing associations are common among small companies, “this is the first time you’ve seen two giants do something like this,” James Ellis, dean of the University of Southern California’s Marshall School of Business, told Reuters.
The agreement, announced on Tuesday, would apply to goods and services not directly related to making the beverages they sell, such as information technology hardware, office supplies, travel and facilities services, transportation, and maintenance, repair and operating supplies, the companies said.
It also comes at a time when corporations are wringing out costs in a bid to improve profits.
“They’re in businesses that are not necessarily competing, but they’re looking for similar types of goods. It’s a great way to leverage their buying power,” said Ellis, who noted that the agreement covers “back of the house” products and services.
“It’s not anything that has to do with the customer, the product, the brand, or the advertising,” he said.
While suppliers who lose business will certainly be unhappy about the agreement, others could use it as an opportunity to increase volume and potentially expand the number of products they are selling to the companies, Ellis said.
Specific cost-savings will depend on the negotiated terms for each purchase, the companies said.
PepsiCo shares closed at $60.60 on the New York Stock Exchange, where Anheuser-Busch closed at $47.55, before the announcement was issued. Shares of both companies were unchanged in after-hours trade.
Reporting by Lisa Baertlein; Editing by Phil Berlowitz