By Owain Johnson

Sales of Pepsi in Venezuela have grown by 72% in the last two years and are approaching those of Coca-Cola, according to PepsiCo's strategic partner in Venezuela, Empresas Polar.

Coca-Cola still possesses 56% of Venezuela's cola market, leaving Pepsi with 44%, but Pepsi has increased its market share by 14% in the last two years.

"We are still in second place in the market, but we are increasingly closing the gap between us and the market leaders," Polar's director of soft drinks and sports drinks, Gustavo Hernández, said. "We have definitely stopped being a distant competitor and are now a real threat."

PespiCo and Polar's joint goal is to establish Pepsi as the market leader in Venezuela by 2005. The company has already exclusive contracts with a number of local fast-food chains to counterbalance Coca-Cola's global alliance with McDonald's.

Coca-Cola is produced and distributed in Venezuela by local company Panamco. Hernández said Panamco's accounts, which were presented to the Caracas Stock Exchange, show the company's sales are falling, despite the generally buoyant performance of the Venezuelan soft drinks market.