Tingyi Holding and PepsiCo have reached a strategic alliance agreement, and Master Kong Beverages will now fill the company with PepsiCo in China. It will become PepsiCo's franchise bottler in China and PepsiCo will use its overseas holding company to set up 24 wholly-owned and joint-venture filling companies in China. The shares held in China were transferred to Master Drinks, which resulted in Pepsi getting a 5% indirect shareholding in Master Drinks and at the same time in 2015 has the right to raise the indirect shareholding to 20%. At present, PepsiCo’s status as a corporate legal person, shareholder structure, company name, and company charter do not change.

In an interview with a reporter from the China Sankei Shimbun, China Investment Research Advisor Liang Mingxuan pointed out that Master Kong has a good product sales channel and a strong brand marketing capability in the mainland market, which can effectively compensate for Pepsi Cola's “satisfaction with water and soil” and enhance the situation. Its profit margin, coupled with the PepsiCo China’s ownership of its non-alcoholic beverage bottling business to Master Kong Beverage Holdings, indicates that Master Kong can own its non-alcoholic beverage bottling business, which will, to some extent, compete with Coca-Cola. , weaken Coca-Cola's competitive advantage over Pepsi.

This is not the first time that large multinational beverage companies have cooperated with Chinese companies. In September 2008, Coca-Cola announced the acquisition of the entire issued share capital of Zhu Xinli’s listed company Huiyuan Juice in Hong Kong for HK$17.92 billion. On March 18, 2009, the Ministry of Commerce rejected the anti-monopoly application of Coca-Cola for the acquisition of Huiyuan Juice on the grounds of "adverse impact on competition."

In a recent announcement, Master Kong said: "This alliance is subject to the approval of the Chinese government and the Hong Kong stock exchange Master Kong shareholders meeting."

“The Ministry of Commerce conducted an anti-monopoly review to prevent most of the market share from being in the hands of a small number of enterprises, and the competitive environment was damaged.” Liang Ming Xuan said: “As a result, the overall benefits of the program to the market should be highlighted in the submitted plan. And put forward an effective anti-trust plan to ensure that companies do not form a monopoly.”

"Our alliance proposal has yet to be approved by the government. We have already submitted our application and we will continue to carry out our work for this purpose," Pei Xiangmei, vice president of group affairs of PepsiCo Greater China, said in an interview with a reporter from the "China Sankei Shimbun": "For PepsiCo continues to work in China. This alliance initiative shows that PepsiCo’s commitment to China will not only not be interrupted but will also be strengthened. We hope that the alliance initiative will be approved and we will do better, develop faster and grow stronger. We are very We are confident that the commitment of the chairman and CEO of PepsiCo to commit $3.5 billion in 2008 and 2010 will continue to move forward. If the alliance is approved, our focus will be slightly adjusted and Master Kong will act as PepsiCo. The Chinese franchise bottlers will produce and sell Pepsi-related products. Pepsi will focus more on brand marketing and R&D."

Liang Mingxuan pointed out that Pepsi needs to further intensively cultivate the Chinese market, grasp the characteristics of the market, fully understand the Chinese consumers' dietary habits, carry out sinking channels, implement the “localization” business strategy, and at the same time increase the difference between products and competitors and achieve differences. The purpose of its products, enhance their comprehensive competitiveness.

“PepsiCo is not only a drink but also an agriculture,” Miao Xiangmei told reporters. “PepsiCo has invested more than 200 million yuan in China’s agriculture. We have five food factories in Greater China and currently build the sixth food factory in Wuhan. There are also eight large-scale demonstration farms, which will continue to promote development plans in agriculture. Not long ago, we signed a memorandum of understanding on sustainable agricultural development with the Ministry of Agriculture of China to support the development of new rural areas in China during the 12th Five-Year Plan. One of the main contents of the memorandum is to work with the Ministry of Agriculture to establish large-scale sustainable demonstration farms."

Liang Mingxuan pointed out that Master Kong and Pepsi currently have the second and fourth market share in soft drinks and snack products, respectively, which have a relatively large market share. If this acquisition is passed, Master Kong’s share may exceed that of Coca-Cola’s market share. Rate, therefore, the acquisition involves anti-monopoly regulations, need to get the government's anti-monopoly review.

When talking about the failure to pass the review and PepsiCo's strategy in China, Wu Xiangmei said: "I think like a man, there is a decision and a direction. We will spare no effort to go forward and try our best to hope it can succeed. Of course, if things don't succeed, Pepsi will still be PepsiCo, what to do and how to do it, and if so we will continue to work hard in China. Pepsi has annual plans in China and the annual plan will continue to be implemented. With new goals, we believe that the Alliance initiative benefits many parties and is a win-win situation. Therefore, we hope that our efforts will ultimately be successful."