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Pepsi Suing Coca-Cola Over Powerade Ads

EMILY FREDRIX   04/13/09 06:46 PM ET   AP

Pepsi Suing Cocacola

MILWAUKEE — PepsiCo Inc. sued rival Coca-Cola Co. on Monday over ads for a new version of Coca-Cola's sports drink Powerade, saying the campaign makes false claims that could hurt its Gatorade brand.

The Purchase, N.Y.-based company asked the U.S. District Court in the Southern District of New York to stop Coca-Cola's campaign.

PepsiCo said the ads for Powerade ion4 are false in saying it's the "complete" sports drink, better than Gatorade because that drink is missing two electrolytes _ magnesium and calcium. It said there was no evidence the new Powerade is better than Gatorade and that the Coca-Cola-made drink has the extra electrolytes only in trace amounts anyway.

Scott Williamson, a spokesman for Atlanta-based Coca-Cola, said the company supports Powerade.

"We stand by our product and are prepared to defend the role that Powerade plays in hydrating consumers," he said.

Gatorade, which PepsiCo acquired as part of its purchase of Quaker Oats Co. in 2001, is an important one for the company, said John Sicher, editor of the trade publication Beverage Digest.

PepsiCo, with brands like Mountain Dew and Pepsi-Cola, is the second-biggest soft drink maker behind Coca-Cola. But in the sports drink category, Sicher said, Gatorade dominates with a 77.2 percent share of the category's volume and was a big reason PepsiCo bought Quaker.

"Gatorade has driven a lot of PepsiCo's North American beverage growth for many years," he said.

Powerade is a distant No. 2 player, with a market share of 21.7 percent last year. The sports drink category was worth about $7.6 billion in retail sales in 2008. By comparison, the entire U.S. carbonated soft drinks market was worth than $72.7 billion in retail sales last year.

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Filed by Julie Satow  |