Chile's Compania Cervecerias Unidas SA (CCU) has announced that a contentious 10-year contract between one of its bottling units and Coca-Cola Co. (KO) is now in effect.

The terms of the contract between CCU subsidiary Embotelladors Chilenas Unidas SA (Ecusa) and Coca-Cola's CS Beverages Ltd, Schweppes Holdings Ltd and Canada Dry Corporation Ltd was approved by the Antimonopoly Commission last week.

Under a previous agreement with Cadbury Schweppes Plc (CSG) Ecusa (a franchisee of PepsiCo Inc.) had a contract to bottle Canada Dry and Crush in Chile until 2004. But Coca-Cola wanted to issue a 60 day termination notice when it bought the soft drinks business of Cadbury Schweppes in over 100 countries in 1999, including Chile.

Pepsi Cola claimed this represented a threat to free competition in the soft drinks industry and requested an injunction against Coca-Cola's action.

But in September Coca-Cola and CCU reached an agreement to modify the bottling contract, with a contingent on the Anti Monopoly Commission judging it was not a threat to free trade.

The contract will run for 10 years and will then be renewable for consecutive five-year periods.