The Caracas mayor's office has ordered PepsiCo Inc.'s (PEP) local unit in Venezuela to remove a giant, iconic ball with the soft-drink-maker's name and design on it that sits atop a skyscraper in the heart of nation's capital.

A brief statement Tuesday from state-run news agency ABN said the mayor's office will also force Pepsi Cola Venezuela SA to pay a $1.8 million fine for not having had a permit for the advertisement over the past seven years.

Officials at Pepsi weren't immediately available for comment.

Pepsi is the dominant soft-drink seller in Venezuela, beating Coca-Cola Co. and others. Pepsi and other popular, private-sector firms have come under fire recently as the government of President Hugo Chavez moves more aggressively toward a socialist system and rails against capitalism.

Pepsi has a close relationship in Venezuela with Empresas Polar, the country's top food producer. Last month, Chavez ordered the expropriation of several warehouses in the western city of Barquisimeto owned by Polar and partially used by Pepsi.

The Pepsi ball, with bright red, white and blue colors, sits over the 26-story Polar Tower 2 in the popular Plaza Venezuela area of Caracas.

The ABN statement said the city has also begun a process against Pepsi for not having a set of maintenance plans for the sphere, and for not renewing an insurance policy for it after it was installed in 1999.

See a photo of the Pepsi ball at: http://cdn.wn.com/ph/img/02/4a/a8a8de4f0837d9bfc9fc7c8d58b3-grande.jpg

-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738; dan.molinski@dowjones.com
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