Virgin deputy shuns new cola

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RICHARD BRANSON'S closest lieutenant strongly opposed the decision last week to launch Virgin cola and other soft drinks, arguing it would devalue the Virgin brand.

Robert Devereux, chairman of Virgin Communications and Mr Branson's brother-in- law, advised against Virgin cola, the first of many new products and services destined to carry the Virgin name, but he was overruled.

According to Mr Branson: 'Robert Devereux thought it would cheapen the Virgin name. He rang up and told me he thought it was a mistake. But I think he's now on-side.'

Mr Devereux is in charge of Virgin's fast-growing entertainment division, which includes the Virgin 1215 radio station, television studios and publishing and computer games. However, the cola venture, a 50/50 equity joint venture with Cott Corporation of Canada, comes under the auspices of the Virgin Retail Group, run by another Branson aide, Trevor Abbott.

Virgin, which plans to sell 1 billion cans of Virgin cola a year by year two, last week clinched a key distribution deal with Tesco. Other deals with an off- licence chain and a string of newsagents are expected soon.

Mr Branson said: 'I've got a feeling it could be the most profitable business we've ever got involved in.'

Cans of Virgin cola are scheduled to be in Tesco stores from 16 November. The drink will also come in large plastic bottles - the preferred package size of supermarket shoppers. An advertising campaign will follow, either before or shortly after Christmas.

Virgin, which also unveiled details of its plan for own-brand vodka this week, wants to launch fruit juices and mineral water next year. Virgin credit cards and other financial services are still some way off.

The cola will retail at about 25p, compared to 32p for Coca- Cola. Mr Branson described the high price of Coke as 'in effect a brand tax'. The start-up cost of the joint venture was 'a couple of hundred thousand pounds at most', he said.

Virgin's parter, Cott, already makes Classic cola for Sainsbury and is in talks with Argyll, the Safeway chain owner, about another premium own-label cola.

It is well placed to win more business. It has a controlling interest in the Yorkshire-based fizzy drinks company, Ben Shaw's, which makes cheap own-label colas for virtually every British supermarket chain.

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