Dr. Pepper Can End Partnership With Coke Bottler, Judge Says | Company Business News

(Bloomberg) — A Texas judge ruled that Keurig Dr. Pepper Inc. can end its partnership with the distribution and bottling operations in California and Nevada that also serves rival Coca-Cola Co., part of Keurig’s effort to move Dr. Pepper ahead in the soda industry’s ongoing cola wars.

The ruling on Monday says that the license agreement between Dr. Pepper and Reyes Coca-Cola “is and shall be terminated effective Oct. 27, 2025,” allowing Dr. Pepper to do direct store delivery of its brands. 

Reyes Coca-Cola Bottling, which didn’t immediately respond to a request for comment, is a franchise-owned bottler and distributor of Coca-Cola products and the Dr. Pepper brand. It’s a unit of Reyes Holdings, a privately held food and beverage distributor that includes Reyes Beverages Group, the largest beer distributor in the US, and Martin Brower, the country’s largest distributor of McDonald’s products. 

“We look forward to bringing this distribution of the Dr. Pepper trademark into Keurig Dr Pepper’s DSD system this fall, further building scale in our routes to market,” Keurig said in a statement.

Dr. Pepper has for many years counted on bottlers controlled by Coca-Cola and PepsiCo Inc. But Keurig is building up its own bottling and distribution and eliminating its dependence on competitors in some markets. The company said it has taken back distribution in about 30 markets through various transactions since the 2018 merger that created Keurig Dr. Pepper.

Keurig Dr. Pepper had been seeking to end a relationship with Reyes Coca-Cola Bottling, which bottles and distributes Dr. Pepper across 10 states. Keurig Dr. Pepper sought a pretrial court order that would allow it to terminate the relationship in the two states, both large and key markets. 

Keurig filed its suit in Texas, where one of its two headquarters are located. (The other is in Burlington, Massachusetts.) Keurig contended that under Texas law, once the agreement with Reyes expires, it has the right not to renew it.

Reyes had argued that the partnership can’t be severed because the business at issue is in California and under that state’s law, the agreement between the two parties can only be terminated based on performance. 

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