Coca-Cola will pay up to $21.1 million to Burger King to help ease a dispute over Coca-Cola employees tampering with a Frozen Coke promotion at Burger King to boost results.
The soft drink giant will pay $6.4 million to Burger King, which the company will use for advertising, according to new reports citing a letter from Burger King CEO Brad Blum to BK restaurant operators.
Coca-Cola will also pay $1,000 to each Burger King franchise that used a Frozen Coke machine for a total of $8.4 million and cover a $500 deductible for repair costs that could total $5.4 million.
Burger King, Miami, and Coca-Cola, Atlanta, appeared to have patched things up earlier this month when Burger King reversed an announcement that it was dropping all frozen carbonated beverages, including Frozen Coke, from its menu (Xtra, Aug. 5).
The rift began when Coca-Cola admitted that some of its employees had rigged a test promotion of Frozen Coke at Burger King restaurants in 2000. After a three-week trial went poorly, members of Coca-Cola’s fountain division offered a man $10,000 to bring children into Burger King to order value meals featuring Frozen Coke (Xtra, June 19).
The allegations first appeared in a lawsuit filed May 19 by former Coca-Cola employee Matthew Whitley (Xtra, May 22). Since then, the U.S. Attorney’s Office in Atlanta has begun an investigation of the allegations and the Securities and Exchange Commission has made an informal request for documents related to the accusations in the lawsuit.
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