Pepsi and other drinks in the group will be made in Iraq

PepsiCo has signed a deal with Baghdad Soft Drinks Company (BSDC), to produce and distribute Pepsi and the company's other drinks, including 7-Up.

The drinks will be available in the first half of 2004, and could create up to 2,000 jobs in Iraq at BSDC.

Pepsi entered Iraq in 1950 but left in late 1990, when sanctions were imposed.

The agreement will serve an area in central Iraq with some 40% of the country's 26 million people.

Good to be back

In March 2003, left-wing rebels in southern India attacked shops selling Coca Cola and Pepsi as a mark of protest against the US-led war on Iraq.

A Pepsi warehouse in the area was also attacked as being a symbol of American "aggression".

Saad Abdul-Latif, president of PepsiCo International's Middle East-Africa region, hopes Iraqis will take to the brand, and said: "We're delighted to resume local production."

He praised the experience and expertise of the Baghdad company, which became a Pepsi franchisee in 1984.

As part of the re-launch, the drinks, including Mirinda, will have new bottle designs with contemporary graphics.