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Pepsi half-withdraws from Burma!



Full text of a letter sent to Father Joseph LaMar at
Maryknoll, one of the leaders in pressuring Pepsi to get out of Burma:

Pepsico letterhead, Purchase, NY

April 22, 1996

Dear Father Lamar:

When we first spoke about Burma I promised to stay in touch with you
on the subject. In that spirit, I wanted to let you know about a
change in our business there. We've decided to sell PepsiCo's minority
stake in our franchise bottler and we expect to finalize the
divestiture soon. As a result, we will have no employees and no assets
in the country.

We're taking this action for a number of reasons, including the
sentiment expressed by you and others about investing in Burma at this
time. Having said that, let me reiterate our belief that free trade
leads to free societies.

Sincerely,
Edward V. Lahey, Jr.
Corporate Secretary

------------------------

Pepsi products will still be sold in Burma.  Activists will ask them
why at their annual Shareholder Meeting next Tuesday in Purchase, New
York.

-- Charlie Scheiner, Westchester People's Action Coalition

------------------------

Here's how the Bloomberg Business News reported the story, which will
probably be all over the business press tomorrow:

PepsiCo to Exit From Burma Bottling Joint-Venture

Purchase, New York, April 23 (Bloomberg) -- PepsiCo Inc.  plans to
sell its 40 percent stake in a bottling joint-venture in Burma,
yielding to critics of its business in the military-ruled country, a
senior executive said.

"We believe doing business (in Myanmar) is an important way to help
the country develop," said Barry Shea, vice president in charge of
Southeast Asia for PepsiCo International.  "Certain activist groups
obviously don't agree.  And Myanmar is a hot spot at the moment."

Pepsi will probably sell its stake in Pepsi-Cola Products Myanmar Co.
to its main partner, Myanmar Golden Star Co., Shea said.  Myanmar
Golden is owned by Thein Tun, a Burmese Businessman.

"Our franchise partner has the first purchase option," Shea said.

The venture was formed in 1991, after Pepsi had been absent from
Myanmar, also called Burma, for about three decades, coinciding with
the seizure of government control by a junta led by Gen. Ne Win.  The
Myanmar company has a 10-year franchise to bottle and distribute
Pepsi-owned products.

Shareholder groups and activists have complained that Burma's military
junta violates human rights.  The Burmese military junta, which chose
its own name for the country -- Myanmar, has refused to relinquish
power to the democratic opposition that won 82 percent of the vote in
1990 elections.

Domestic revenue last year by Pepsi-Cola Products in Myanmar was $20
million, Shea said.  An increase of 25 percent was projected for this
year.  Aside from its namesake cola, Pepsi also sells 7-Up and Miranda
soft drinks.

Pepsi will honor its contract in the "short-term" to sell syrup
concentrate and allow the use of the Pepsi trademark by the
bottler, said Keith Hughes, a Pepsi spokesman based in Purchase, New
York.

The move comes as shareholders and customers have taken Pepsi to task
for doing business in the Southeast Asian country.  Harvard University
decided earlier this month not to switch its $1 million beverage
contract to Pepsi from Coca-Cola Co., bowing to student pressure.
Four U.S. cities also have bans on city purchases of goods or
services from companies that do business with Burma.

"Those that have asked us to review the situation in Burma have been
quite concerned with our investment in that marketplace," Hughes said.
"We feel quite certain that this will address the concerns of many."

A critic of Pepsi's business in Burma said the plan to sell the stake
in the bottler while honoring the licensing contract won't go far
enough to answer those concerns.

"It's still not going all the way to satisfying those that have been
boycotting them," said Simon Billenness, of Franklin Research and
Development Corp., which manages about $450 million.

Billenness was included in a meeting this afternoon with Pepsi
officials and Father La Mar of the Maryknoll Fathers and Brothers, a
Catholic missionary order that has objected to Pepsi's business in
Burma.

"I think you'll see more universities doing what Harvard did," said
Billenness, whose Boston-based firm seeks to make socially-responsible
investments. He estimated that about 100 universities had student-led
movements to boycott products from companies that do business with
Burma.

"Burma is the South Africa of the 90s," he said.

Human rights groups have reported that the military government, called
the State Law and Order Restoration Council -- or SLORC -- has
murdered, raped and tortured Burmese and minorities, driving hundreds
of thousands of refugees into Bangladesh and Thailand.

A United Nations report released last year said the SLORC has used
forced labor to spruce up the country as it mounts a campaign to
boost tourism and attract desperately-needed foreign currency.

Pepsi joins a parade of U.S. companies, including Levi Strauss
Associates Inc., Federated Department Stores Inc.'s Macy's, Liz
Claiborne Inc., Spiegel Inc.'s Eddie Bauer unit and Amoco Corp., which
have already stopped doing business in Burma.

Pepsi's business had sales of $8 million in 1995, a fraction of its $3
billion in international beverage sales, said Hughes.

Shareholders from Texaco Inc. and Unocal Corp. have requested the
companies cease doing business there.

--
Lee J. Miller in Bangkok and Tom Cahill in the New York newsroom.