Pizza Chain Claims Pepsi Played Dirty
LOS ANGELES (CN) - PepsiCo., angry because California Pizza Kitchen was terminating its purchase agreement for fountain drinks, sent the confidential agreement to Coca-Cola to interfere with the pizza chain's business, the company claims in court.
California Pizza Kitchen sued Pepsico Sales in Superior Court, for interference and breach of contract.
The pizza chain claims that when it told Pepsi it was ending its supply agreement for fountain drinks, Pepsi intentionally emailed the agreement to Coca-Cola "as part of Pepsi's attempt to prevent CPK from engaging in future business with Pepsi's rival."
California Pizza Kitchen, which has more than 200 restaurants in 32 states, claims it told Pepsi in April that it was terminating its agreement for "failure to provide an acceptable level of quality and service."
"Pepsi immediately wrote in response that it was not willing to terminate the Fountain Agreement and that, if CPK was not willing to continue under the Fountain Agreement, Pepsi would pursue legal action against CPK to recover alleged damages in excess of $5 million," the complaint states.
Pepsi's email "set forth in writing specific terms and conditions of the Fountain Agreement, including its term, minimum purchase requirements, and contractual remedies in the event of a breach, and - despite a specific non-disclosure covenant in the Fountain Agreement - copied The Coca-Cola Company on its correspondence," according to the complaint.
California Pizza Kitchen claims that this April was not the first time it had told Pepsi of its concerns that "CPK's carbonated soft-drink incidence was at or near the lowest in the industry and had experienced considerable year-over-year decline." It claims it warned Pepsi about this in November 2011, and repeatedly in 2012, but Pepsi "was unable to identify effective solutions for reversing the declining trends."
Pepsi began working as California Pizza Kitchen's exclusive fountain drink supplier in 2007.
California Pizza Kitchen seeks damages for breach of contract and tortious interference.
It is represented by Peter Marketos and Leslie Chaggaris of Reese Gordon Marketos in Dallas.