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Last Updated: Monday, 18 April, 2005, 19:33 GMT 20:33 UK
Coca-Cola probe brought to an end
Bottles of Coca-Cola in a fridge
Increased competition in the drinks industry has put pressure on sales
Coca-Cola, the world's largest soft drinks company, has said that US regulators have dropped their two-year probe into its accounting practices.

The Atlanta-based firm was accused of inflating Japanese sales, as well as rigging a marketing test in the US.

Coca-Cola has neither admitted nor denied any wrongdoing. It will not have to pay a fine or a penalty.

Chief executive Neville Isdell said the company would look at its corporate compliance and disclosure practice.

Shares in Coca-Cola dropped 29 cents to $41 in New York.

Bitter taste?

The investigations date back to 2003 and have been hanging over the firm, analysts said.

Coca-Cola misled investors

The US Securities & Exchange Commission accused Coca-Cola of inflating Japanese sales between 1997 and 1999.

"Coca-Cola misled investors by failing to disclose end of period practices that impacted the company's likely future operating results," said Richard Wessel, head of the SEC's Atlanta office.

At issue was a practice known as "channel stuffing" or "gallon pushing", whereby bottlers bought more concentrate than they needed, often enticed by credit deals and the lure of improved relations with Coca-Cola.

The US Justice Department, meanwhile, was looking into allegations by whistle blower Matthew Whitely, who said he was fired for bringing accounting problems and allegations of fraud to the attention of senior management.

Coca-Cola denied the majority of the allegations. It did, however, admit that a taste test in a hamburger restaurant may have been compromised.

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