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Soda supply fizzles out after 7UP bottler closes

01/10/02

STEVE WOODWARD

You can "Obey Your Thirst" with Sprite.

You can "Do the Dew" with Mountain Dew.

But you can't "Make 7UP Yours."

With the December closure of 78-year-old Portland Bottling Co., 7UP's exclusive distributor in Oregon and parts of Washington, Uncola drinkers are gulping air as stores run out of stock with no replacement distributor yet in sight.

The same goes for Dr Pepper, RC Cola and Diet Rite drinkers in the Northwest, A&W Root Beer, Sunkist and Seagram's Ginger Ale drinkers in Oregon, and Squirt drinkers in Portland and Seattle.

Portland Bottling's bankruptcy has left much of the Northwest without a distributor for brands made by Dr Pepper/Seven Up of Plano, Texas.

Those brands, which normally account for as much as 15 percent of the soft-drink shelf space on grocery shelves, are disappearing from stores and soda fountains as retailers sell out of their inventory.

"Everybody's in the same boat," said Bridget Flanagan, a Safeway spokeswoman.

Fred Meyer spokesman Rob Boley said the company was sorting through its options for getting the out-of-stock products back into stores.

Dr Pepper/Seven Up, a unit of Cadbury Schweppes of London, expects to resume the flow of its flavored waters into Oregon and Washington "within the very near future," spokesman Kyle Rose said.

"We're still looking at all of our options now," Rose said, adding that permanently turning off the spigot to the Northwest is NOT an option.

"It's an extremely important market to us," he said.

Portland Bottling also distributed Cadbury Schweppes' Welch's drinks in Oregon and Washington, as well as Crush, Hires and Canada Dry ginger ale in Washington. In addition to the Cadbury brands, the company distributed Jones Soda, Yoo Hoo, Hawaiian Punch and Langer's Juices, all made by other manufacturers.

On Dec. 14, Portland Bottling shut its doors, laid off its remaining 245 employees and turned over its plant equipment, trucks and customer accounts for Chapter 7 liquidation by the U.S. Bankruptcy Court for Oregon.

This week, the white bottling plant crowned by the landmark red 7UP sign on Sandy Boulevard near Northeast 12th Avenue was empty but for a single worker.

Robert C. Cole Jr., the 58-year-old soft-drink industry veteran who bought the company in 1990, sat in his office generating Form W-2 wage and tax statements to mail to employees.

"I'm gone," sighed Cole, chief executive officer and 93 percent owner of National Brands, the holding company for Portland Bottling. "The bank owns the assets."

The bank, in this case, is LaSalle Bank of Chicago, which loaned $5.35 million to Portland Bottling in March 2000.

Other notable creditors include the Portland Bureau of Water Works and the Portland Rose Festival Association.

Portland Bottling had pledged -- but couldn't pay -- $51,000 to the Rose Festival organization as the official soft-drink sponsor of the 2001 G.I. Joe's 200 auto race, its 18th consecutive year as a sponsor.

Portland Bottling also owed the city of Portland $102,000 for water used to make soft drinks and to wash bottles, among other things.

"They were a $100,000-a-year water customer, a significant customer," said Ross Walker, a spokeswoman for the Water Bureau, adding that the bottler also paid about $50,000 a year in sewerage bills.

Cole said his costs rose $1.8 million during 2001, including an $850,000 boost in the price charged by Cadbury Schweppes for its proprietary soft-drink syrups, from which Portland Bottling created bottled and canned drinks.

Sorry I didn't come out and visit you guys while I was there, I was so busy running around going here and there.