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PepsiCo and Chinese soft drinks maker battle in court over recipe

world Updated: Dec 09, 2010 11:44 IST

A Chinese soft drinks maker has won a lawsuit against a local unit of PepsiCo over claims that it had illegally used its recipes and business secrets, state media said on Thursday. Last Friday a court ordered the PepsiCo China Investment Co to stop selling 'Tianfu Cola' and to return the recipe to the Chinese company, the Shanghai Daily said.

But the court in the southwestern mega-city of Chongqing rejected Tianfu's demand for one million yuan (150,000 dollars) in compensation from its former Joint Venture (JV) partner, the report said. Tianfu and PepsiCo formed a tie-up -- Chongqing Pepsi-Tianfu Beverage Co -- in 1994 to make soft drinks under the names of both companies, the report said. But Tianfu sold its 40% stake in the JV to PepsiCo in 2006 for 130 million yuan because it was losing money. The Chinese company launched its action in October last year.

PepsiCo, the maker of Pepsi soft drinks, was not immediately available for comment. Tianfu General Manager, Qian Huang was quoted by the Global Times as saying the he planned to take further legal action against PepsiCo seeking "trademark loyalties and compensation for the devalued Tianfu trademark".

PepsiCo announced in May this year that it would invest 2.5 billion dollars in China over the next three years in new plants, research facilities and promotional activities. It also planned to increase its range of Chinese-designed and developed products, the company said.