Coca-Cola Co, the world's largest soft-drink maker, settled a dispute with Burger King Corp over rigged tests for a Frozen Coke drink. The restaurant chain scrapped plans to drop the beverage.
The slushy dessert drink is "performing better than anticipated," Burger King spokesman Rob Doughty said. Burger King, the second-largest US hamburger chain, said last month it was pulling the beverage because sales were disappointing. Terms of the resolution weren't disclosed.
Coca-Cola said in June that some employees improperly manipulated results of a market test of fountain sales at Burger King after an investigation into claims by a former employee.
Employees were disciplined in 2001 for buying scores of meals including chicken sandwiches and Frozen Coke to influence a market test of a promotion at Burger King restaurants in Richmond, Virginia, in March 2000.
"They made the customer happy," said Neal Goldner, an analyst at State Street Global Advisors, which owned 71 million Coca-Cola shares as of March.
Burger King chief executive Brad Blum and Coca-Cola president Steven Heyer earlier this week met and "finalized details to resolve the issues between our companies related to Frozen Coke products," Burger King told its franchisees in a voice-mail message last night.
Dan Schafer, a spokesman for Atlanta-based Coca-Cola declined to comment on the terms of the resolution. Doughty declined to comment further.
Shares of Coca-Cola rose US$0.13 to US$45.10 as of 1:58pm in New York Stock Exchange composite trading. Burger King, which trails McDonald's Corp in sales, is owned by closely held investment firm Texas Pacific Group.
The settlement was reported earlier by Dow Jones. The agreement was valued at about US$10 million, John Sicher, editor of Beverage Digest, told Dow Jones, citing people familiar with the settlement. Sicher didn't immediately return a telephone call seeking comment.
The test-fixing incident was cited by Matthew Whitley, former director of finance for the Coca-Cola's soda-fountain division, amid allegations the company inflated sales and profits. The US attorney's office in Atlanta and the Securities and Exchange Commission are investigating the allegations.
Whitley, in two lawsuits claiming he was wrongfully fired, alleges the fountain division falsified sales and gross profits by more than US$2 billion and concealed failures with new products.
An internal investigation by an independent law firm found no basis for Whitley's claims that the fountain division, which accounts for a third of US sales, improperly reported US$750 million in annual expenses for three years as marketing allowances rather than rebates, Coca-Cola said in June.
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