Tuesday, 2 July 2019

cola wars

The always engaging Messy Nessy Chic reminds us of the time that soft drink giant Pepsi held temporarily the distinction of being one of the world’s largest naval powers, taking ownership of seventeen obsolete diesel-powered submarines, a decommissioned crusier, destroyer and frigate and a fleet of oil tankers from the quickly disintegrating Soviet Union in 1990.
The relationship of the rival cola company vying for market dominance and the Eastern Bloc goes back to the cultural, domestic-science exchanges held between Nikita Khrushchev and Richard Nixon back in July of 1959, these kitchen debates netting among other things a photograph of the Soviet Premier enjoying a cold, refreshing beverage. Pepsi executives recognised a monumental opportunity to break into new markets. Straightforward expansion, however, was hindered by US sanctions and a Soviet restriction on the export of rubles abroad but worked out a deal to trade syrup for Stolichnaya vodka. The monopoly was negotiated in 1972 and would expire unless renegotiated in 1989. The USSR was a very different place when the terms of the trade deal were coming to an end and with little else of value to barter with, the Soviets offered part of its navy. Sweden and Norway bought the tankers while the tactical vessels were scrapped and sold as salvage, the president of the company quipping to then US president George HW Bush that they had managed to disarm the USSR at a faster pace than the American administration.