The American beverage group Coca-Cola is expected to modify the terms of its $4bn juice-and-chips joint venture with Procter & Gamble after criticism that under-performing brands could jeopardise profits, reports the Financial Times. The joint venture, named Simply Juice, would create new health-oriented juice drinks by tapping into both Coca-Cola's vast distribution system and P&G's extensive research and development arm. The new company should combine Coca-Cola's Minute Maid orange juice operations with P&G's drink brand, Sunny Delight, and Pringles potato chips. Lately, P&G, the American consumer products giant, has been selling off peripheral brands in an effort to streamline operations. Earlier this year, the company created a unit called New Business Ventures to manage joint venture projects, including the P&G deal. However, from the moment the P&G joint venture was announced in February, it has been criticised by analysts because it compromises profit growth in return for two mediocre brands. Concerns have also been raised as to whether Coca-Cola bottlers would be willing to distribute Pringles chips, which are less profitable than drinks. Both companies originally estimated the joint venture would have an initial stable of 40 brands and sales reaching $5bn in two years. The two companies claim that synergies would likely total $200m by 2005. Source: Financial Times
