Oregon city sues PepsiCo over breach of contract

Chris Rizo Feb. 24, 2009, 1:11pm

ALBANY, Ore. (Legal Newsline)-An Oregon city has decided to sue a PepsiCo subsidiary for more than $100 million over the company's decision not to build a plant there.

The Albany City Council voted Monday to take legal action against SVC Manufacturing Corp., charging that the company breached its contract with the city to build a plant there to make Gatorade and Propel Fitness Water.

The complaint is to be filed today in Linn County Circuit Court.
The city of more than 42,000 people alleges that in 2006, SVC Manufacturing Corp. said it would build a $165 million beverage plant as well as an $85 million bottle-making factory on a 241-acre site the company bought within the city.

However, in November, the company told the city that it has decided to jettison plans for the facilities amid changes in the beverage market.

In November 2008 the company notified the city that because of changes in the market the plant would not be built.

For its part, PepsiCo said it had offered the city "proposals that more than recognized the city had made investments to prepare for a new manufacturing facility."

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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