MOSCOW, APRIL 9 -- PepsiCo Inc. today announced a $3 billion deal that will double Pepsi sales in the Soviet Union through a barter arrangement that uses hard liquor and ships in place of hard currency.
"This is the largest and most wide-reaching agreement ever signed in the field of consumer goods," Donald Kendall, chairman of PepsiCo's executive committee, told a news conference after the signing.
The agreement builds on previous ties dating back to the early 1970s under which Pepsi began shipping cola concentrate to the Soviet Union in exchange for Stolichnaya Russian vodka.
The red, white and blue Pepsi logo has long been a familiar sign in Moscow and many other Soviet cities. PepsiCo's main competitor, Coca-Cola Co., which arrived here several years after, is less well-known.
PepsiCo will help its partners more than double, to 50, the number of Soviet Pepsi bottling plants and double annual sales from the current 1 billion servings.
"This will generate more than $3 billion in retail sales in the Soviet Union and the United States," said Kendall.
Because there is no way to convert such a massive amount of Soviet cash into dollars, PepsiCo agreed to take its profits in vodka and Soviet-built ships.
The Soviet Union will build at least 10 ships, mostly oil tankers in the 25,000- to 65,000-metric ton range, to help finance the estimated $1 billion that PepsiCo plans to invest in the project.
The ships would then be sold or leased by PepsiCo, working together with a Norwegian partner, on the international market.
Foreign exchange credits from the sale and leasing of the ships would also partly be used for initial investment in two Pizza Hut restaurants scheduled to open this year in Moscow, a PepsiCo-Soviet joint venture.
PepsiCo's exclusive rights to sell Russian vodka in the United States will be extended for another 10 years in the pact.
PepsiCo, based in Purchase, N.Y., had sales last year of more than $15 billion, making it one of the biggest consumer-product companies in the world.
The success of the U.S. company is being closely watched by other Western firms as an indication of prospects in the Soviet market, now opening under the reform policies of President Mikhail Gorbachev.
PepsiCo figures that it sold soft drinks in the Soviet Union worth 300 million rubles ($490 million) last year.
In New York, the stock of PepsiCo rose sharply after the deal was announced. "They have a huge deal with the Soviets, and everybody's positive about it," said a trader. PepsiCo rose $1.50 to $66.50 on heavy volume of more than 669,000 shares in afternoon trading on the New York Stock Exchange.