Just weeks after SoBe told just-drinks.com that it would be moving distribution to Pepsi only in areas where they have no distribution, the company announced today it has terminated its distribution deal with Canadian-based Leading Brands Inc.

SoBe executive VP Tom Schwalm told just-drinks.com in February: "We are going to Pepsi distributors where we have no distribution or where the distribution is weak."

But three weeks later Schwalm now claims that moving distribution to Pepsi is "simply in keeping with our new corporate ownership."

From April 2, 2001, the Pepsi Bottling Group in Toronto, Ontario and Pepsi franchised bottlers and distributors will take over distribution of SoBe in Canada.

Details of the transaction were not disclosed but under its license agreement Leading Brands will receive a termination fee and compensation from South Beach Beverages. It has also been reported that under a new multi-year agreement, Leading Brands will continue to bottle SoBe products in Canada.

In a statement, Leading Brands said that it is pleased with the financial terms of the new arrangement and CEO Ralph McRae said: "Everyone in our company is proud of what we have been able to accomplish with SoBe. In less than two years we have made it the number one new age beverage in Canada."

Tom Schwalm said: "Leading Brands was instrumental in making SoBe a huge success in Canada and we look forward to continuing our relationship with them as bottlers of our healthy refreshment beverages."

He continued: "Moving distribution of SoBe to Pepsi is not a reflection on Leading Brands or its efforts on behalf of the brand, but simply in keeping with our new corporate ownership."

SoBe and Leading Brands may have reached an amicable agreement but one SoBe distributor told Brandweek recently: "It is all going to end up in the courts. I would not want to be in a position where I promised 300 distributors that they would not lose the brand."