Branson's Virgin Cola follows vodka deal

(First Edition)

THE FEROCIOUS battle for the cola market is shortly to intensify when Richard Branson's Virgin Group launches its own brand, undercutting the price of the market leaders Coke and Pepsi, writes Ian MacKinnon.

Virgin Cola should be on the market within six weeks with the company hoping to sell 1 billion cans at slightly less than 30p each within the first year of trading, though 4 million of those will be through its airline.

It is the latest shot in the fiercely competitive cola market, worth a total of pounds 670m annually in Britain alone, which saw a skirmish recently when Sainsbury had to change the lettering on its can after legal action by the Coca-Cola company, which claimed the supermarket's design was too similar to its own.

Last month, Virgin also revealed that it had struck a deal with William Grant, the whisky-maker, and was to launch its own triple-distilled Virgin Vodka. In a further effort to exploit its highly-lucrative Virgin brand name, the company also plans to sell a mineral water and ICL computers under the label.

Mr Branson estimates that Virgin Cola - to be sold in the British and US markets first - could become as large as his airline, Virgin Atlantic, within four years. Once its impact has been guaged, Virgin plans an assault on the Japanese and other markets around the world where total cola sales are worth pounds 9bn.

The new cola will be produced by the Cott Corporation of Canada, which already produces Sainsbury's Classic Cola own brand at its plant near Pontefract in West Yorkshire.