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Starwood Hotels Signs Exclusive Contract with Pepsi;
Drops Coke Products, Plans Integrated Marketing with Pepsi

By Caroline Wilbert, The Atlanta Journal-Constitution
Knight Ridder/Tribune Business News

Mar. 17, 2006 - Take this, Coke.

A year and a half after Steve Heyer resigned from Coca-Cola and took the helm of Starwood Hotels and Resorts Worldwide, Starwood has signed a major deal with Pepsi.

That's right, Pepsi.

Heyer, who quit his job as president and chief operating officer of Coke in 2004 after being passed over for the CEO job, left the company with a $12 million golden parachute. Starwood, which owns brands such as Sheraton, W, Westin and St. Regis, has had an exclusive deal with Coke since Starwood's inception in 1998. Most of the company's U.S. properties now will serve Pepsi products instead.

Coke still will be served overseas and in a few pockets domestically -- including downtown Atlanta, hotels in Disney World in Orlando and the St. Regis chain.

A Starwood spokeswoman said the company switched to Pepsi because of Pepsi's commitment to Starwood hotels, plans for integrated marketing and a good offer on price.

The beverage giants routinely compete for contracts with restaurants, hotels, stadiums and other venues. Coke won the Subway restaurant account away from Pepsi last year. Still, Starwood is bound to sting more than most losses.

Pepsi anyone?


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Copyright (c) 2006, The Atlanta Journal-Constitution

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