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Several Coke bottlers agree to drop suits over Wal-Mart delivery plan

ATLANTA - A rift between The Coca-Cola Co. and some bottlers has been eased as the world's largest beverage maker announced Monday that several suits over its plan to distribute Powerade to Wal-Mart stores directly through the retailer's warehouses were being dropped.

Coca-Cola also said it will work with the bottlers ''to develop and test new customer service and distribution systems.''

Atlanta-based Coca-Cola said that it hoped that all U.S. bottlers will participate in the initiative.

Bottlers participating in the initiative agreed to drop lawsuits now pending in U.S. District Court in Atlanta, and Circuit Court of Jefferson County in Birmingham, Ala., Coca-Cola said in a statement.

It was not immediately clear if all the bottlers that had sued Coca-Cola agreed to drop their claims. Coca-Cola spokesman Dan Schafer said ''substantially all the bottlers in the suit'' had dropped their claims. Asked if that meant all of them, Schafer could not say for certain.

Last year, several bottlers that represent roughly 10 percent of Coca-Cola's U.S. volume sued to try to block a new delivery system that its largest bottler, Coca-Cola Enterprises Inc., wanted to test for the Powerade sports drink.

A major Coca-Cola customer, Bentonville, Ark.-based Wal-Mart Stores Inc., approached the company and its bottlers last summer, saying it wanted to increase availability of Powerade in its stores and help the brand grow faster by delivering the product to its stores through its own warehouses rather than through the bottler system.

The test of the proposal was only being conducted in CCE's territory, but some other bottlers objected, Coke said.

''Our bottling system is our heritage, and it will be the foundation for our future growth. The partnership with our bottlers is what makes the Coca-Cola system powerful and unique, and we will work diligently to ensure that we move forward and succeed together,'' said Sandy Douglas, president, Coca-Cola North America. ''One of the historic strengths of our system has been its ability to change and adapt as our consumers, customers and competitors have changed.''

Under the agreement, the company will join U.S. Coca-Cola bottlers in testing new systems to bring company products to customers who require special services.

Analysts said the news was positive for Coca-Cola.