PepsiCo and The Pepsi Bottling Group have teamed up in Russia.

The two companies announced yesterday (1 March) that they have created a joint venture in the country, comprising PepsiCo's concentrate and PBG's bottling businesses. PBG will have a majority interest in the joint venture and maintain management of the day-to-day operations.

The division, which will be called PR Beverages, will be governed by a board of directors, which will represent the two companies equally.

"The economic outlook for Russia is very bright," said PBG president and CEO Eric Foss. "This joint venture will enable the Pepsi system to respond more quickly to marketplace dynamics. In addition, we will be in an even better position to strategically invest in Russia to accelerate our growth."

PepsiCo vice chairman and chairman & CEO of PepsiCo International, Michael White, added: "This agreement strengthens what has been a very effective working relationship between PBG and PepsiCo. We look forward to working closely with PBG to continue building our business in Russia."

PBG will consolidate the joint venture into its financial results, while PepsiCo said it will recognise the earnings of the joint venture as equity income. The two companies said that this will have no impact on either of their previously announced earnings per share and cash flow guidance for 2007.