Responding to the Aug. 9, 2011 filing by Dr Pepper Bottling Co. of Dublin, Texas, in U.S. District Court in the Eastern District of Texas, Dr Pepper Snapple Group, Inc. issued the following statement:
Signed contracts matter, and we are disappointed that Dr Pepper Bottling Co. of Dublin, Texas, refuses to keep its promises and honor its agreement. We’re not seeking money or to prevent Dublin from selling Dr Pepper made with cane sugar. We simply want them to sell only within their six-county territory and stop marketing and packaging Dr Pepper as “Dublin Dr Pepper.”
Dublin’s conduct dilutes our trademark and creates confusion in the marketplace, because their product is no different than any other Dr Pepper made with cane sugar and sold by several other bottlers. In fact, Dublin’s filing ignores the reality that almost all of the product they sell isn’t even made in Dublin. It’s made by Temple Bottling Co. of Temple, Texas, and is the same cane sugar-sweetened Dr Pepper that DPS sells in distinctive 8 oz. glass packaging throughout Dallas/Fort Worth, Houston and Waco.
We tried to resolve these issues with Dublin without turning to the courts. We even offered alternative packaging that promotes their heritage and their use of cane sugar, but in a way that stays true to the famous Dr Pepper trademark. They not only refused this compromise but actually demanded money to honor their agreement, which left us no choice but to file suit.
Whether you’re the oldest bottler or the newest, the largest or the smallest, no bottler is bigger than the Dr Pepper brand or above the agreement it signed. Unfortunately, unlike the other 170-plus Dr Pepper bottlers, Dublin steadfastly refuses to live up to the contract they signed in 2009.
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"During the last six months, we have made significant strides toward creating two pure-play companies which are poised for success,” said Sara Lee Executive Chairman Jan Bennink in a prepared statement.
“Our objective of building two simpler, faster and more entrepreneurial businesses is being realized. We have defined the organizational framework for our new companies and are continuing to build and restructure our teams for the future. Through our strategic divestments, we are achieving our objective of streamlining the portfolios to provide the best foundation for strong and focused businesses moving forward. We are heartened by the fact that we have been able to deliver solid results for fiscal 2011 while managing difficult commodity conditions and the internal challenges of the spin off. The inherent strength of these two businesses, combined with a new focus and orientation, give me confidence that the two companies will be highly successful when they separate in the first half of calendar 2012."
Chief Executive Officer Marcel Smits added, “Throughout fiscal 2011, our businesses have remained focused on operational performance. We delivered our updated guidance for adjusted EPS, adjusted operating income and net sales. We’ve also maintained a focus on cost reduction activities, lowering our corporate expenses by nearly $100 million over our prior fiscal year. We have introduced new products like Jimmy Dean Jimmy D’s and expanded successful brands like L’OR EspressO and Senseo into new geographies. I’m excited about the progress that we have made this year and continue to have great confidence in the long-term prospects of our businesses.”
The company continues to streamline operations as it progresses toward the spin off. The summary below provides an update on the decisions made to date.
On Aug. 9, the company announced a signed agreement to sell its North American refrigerated dough (Store Brands) business to Ralcorp for $545 million. The sale is expected to close by the end of calendar year 2011. This business was classified as a discontinued operation in the fourth quarter of fiscal 2011.