Business Notes Beverages

Whether it is diet Coke, new Coke, classic Coke, cherry Coke or some other soda, more soft-drink fans buy something sold by Coca-Cola than by any other beverage maker. No. 2 PepsiCo keeps trying hard to catch up, and last week the company may have found a way to do so. Pepsi announced an agreement to buy Seven-Up, the third-largest soft-drink manufacturer, from Philip Morris for $380 million. As part of the deal, Philip Morris retains Seven-Up's bottling plants and food division. By adding Seven-Up's 7% share of the $26 billion soft-drink market to its own 28%, Pepsi will put some serious pressure on Coke, which has 39% of the business.

The move also bolsters Pepsi's position in the fast-growing market for citrus drinks. Pepsi scored an instant hit last year, when it introduced Slice, a lemon-lime soda containing 10% real fruit juice. Designed to appeal to health-conscious sippers, Slice had 1985 sales of about $400 million. Pepsi unveiled a new mandarin-orange version of Slice last week, but Coke countered with an announcement of its own. In February, Coke's Minute Maid division will market lemon-lime and orange soft drinks containing fruit juice and try to take a slice out of Slice's sales.