Two Japanese Coke bottlers have agreed in principle to form a business partnership which could lead in due course to a full merger, according to local reports.

Under the terms of the partnership arrangement, Kinki Coca-Cola Bottling Co. and Coca-Cola West Japan Co., will collaborate to improve their production systems and streamline distribution, while also working on joint IT systems, Jiji Press said today (21 December).

The two companies said they will review in due course whether a full merger is necessary for further business growth. If a full merger were to follow, it would create the second largest soft drinks bottler in Japan, with total sales of around JPY450bn.

Kinki Coca-Cola is located in Settsu in the Osaka Prefecture. An affiliate of Kirin Brewery Co., Kinki recorded sales of  JPY193bn in the year to December 2004. Coca-Cola West Japan Co. is based in Fukuoka and is partly owned by Ricoh Co. It generated sales of JPY253.2bn in 2004.