Magazine article Marketing

Safeway Butts into Cola Wars

Magazine article Marketing

Safeway Butts into Cola Wars

Article excerpt

Safeway is poised to follow Sainsbury with the launch of a high quality own-label cola from the same source as its rival.

Canada-based Cott Beverages is believed to have struck a deal with the Argyll-owned supermarket this week, according to sources close to the retailer. Cott is also believed to be in the early stages of talks with Tesco. Neither retailer will comment

Sainsbury's Classic cola, launched on Monday and revealed exclusively in Marketing (January 13 1994) is just the tip of the own-label iceberg.

Sainsbury, Tesco and Safeway between them control 29.8% (Verdict Research) in value of the UK grocery market. The threat to Coke, the UK's biggest selling brand, is therefore far greater than initially predicted.

Coke was unaware of the Safeway deal when Marketing went to press. Its response to the Sainsbury launch has so far been muted.

"We welcome competition that is fair and honest," said Robert Wilkinson, vice president of Coca-Cola International.

But the soft drinks giant is known to be unhappy about Classic -- a name it uses on the Coke product in the U.S.

"We have made our position known to Sainsbury," said Wilkinson, but he would not confirm if this means legal action. …

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