Pepsi rules out selling Tropicana and Quaker

AMERICAN fizzy drinks giant Pepsi yesterday warned it will consider further price rises in the run up to Christmas to combat rising raw material costs.

But the company – which owns a range of brands including Quaker porridge oats and Tropicana orange juice – ruled out breaking up the business, quashing recent Wall Street speculation.

Chief financial officer Hugh Johnston said: “I’ve looked at every single scenario you could probably come up with in terms of how Pepsi’s portfolio is constructed.

“Taking it apart, I know, would be very, very costly and I really don’t see the benefit in doing it.”

He said that the company benefited in areas such as back-office operations, research and development and procurement from having both a snacks and drinks business, even if the snacks and drinks are not being delivered in the same lorries in all markets.

His comments came as Pepsi – which is bottled under licence in the UK by London-listed Britvic – posted a better-than-expected 4 per cent rise in third-quarter profits to $2 billion (£1.3bn).

Johnston said that weak consumer spending and higher corn, wheat and other commodity prices during the third-quarter had been off-set by lower tax rates and cost-savings from acquisitions.

He added that price rises during the past three months did not hurt demand as much as expected in its snacks business.

Revenues rose to $17.6bn from $15.5bn a year ago, compared with analysts’ estimates of $17.2bn. The firm expects single-digit profits growth for the full-year.

Other brands owned by the company include Doritos tortilla chips, Lipton iced tea, 7-Up lemonade and Lay’s crisps, which are marketed as Walkers in the UK.