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Kingdom, Canada, and all other countries. Net sales in the United States are still the strongest, but international markets are increasing.

Figure 4: PepsiCo Global Sales (Net), 2000 – 2007

Geographic Breakdown

25,000

20,000

U.S. $ Millions

15,000

10,000

U.S. Mexico United Kingdom Canada Other

5,000

0

2000

2001

2002

2003 2004 Ye a r

2005

2006

2007

Source: Annual Reports

FDI Magazine (2002) reported that in 1982 PepsiCo was one of the first TNCs to set up operations in China after the Open Door policy, but the venture was not always a smooth transition. Investing in China involves joint ventures with Chinese partners in order to enter the highly competitive market. In 2002, PepsiCo terminated a joint venture with a Chinese bottling firm after eight years of operating together because the local Chinese partners wanted a larger share of profit margins and expansion outside of their contractual regions. The profit-sharing issues with Chinese partners were exacerbated by government protection of domestic beverage makers. Moreover, the Chinese government controls the location of foreign plants in order to spread competition across the country. PepsiCo claimed that it was pouring money into advertising and marketing, with investment liabilities still outweighing revenues after 20 years.

PepsiCo now has 40 joint and solely owned ventures in China, which is its second largest soft drinks market outside the United States. PepsiCo owns 25 bottling plants and 4 packaged

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