On the shores of Lake Balaton, the largest lake in central Europe, the US soft drinks giant from Atlanta, Georgia, says it has conducted a marketing campaign that has helped it to come from behind and beat its arch-rival.

For two years running, Coke Hungary has beckoned Hungarians to a ``Coca-Cola Beach House,'' an amalgamation of concession stands, games and water sports at the lakeside town of Siofok.

More than a million Hungarians, or 10 per cent of the population, visited the property this summer, the American managing director Paul Garrison of Coke Hungary, told Reuters.

All those visitors, Garrison firmly believes, will become loyal Coke drinkers.

``I have an ancient Chinese saying on my wall,'' Garrison, 42, said during an interview.

``Tell them and they will forget. Show them they will remember. Involve them and they will understand. That's the whole idea here.''

The marketing campaign focused on the Beach House is one of the main reasons Coke claims to have boosted consumption of its carbonated soft drinks over Pepsi by a ratio of 1.6 to one, according to Coke's first quarter figures.

Coke's market share for fizzy soft drinks, which includes Diet Coke, Fanta and Sprite, has risen to 50 per cent, up from 23.5 per cent in 1991 when the company began investing in Hungary, then emerging from the rubble of the former East bloc.

Coke says that the market share for Pepsi, which did not respond to requests for interviews, is about 31 per cent.

Garrison said Hungarians now are among the biggest consumers of Coke in Europe, drinking some 153 eight ounce (236 ml) servings per capita per year. That compares to 118 servings per year in Britain, 88 in France and 89 in other countries of eastern and central Europe, he said.

Pepsi and Coke were in a dead heat in Hungary just two years ago, Garrison said, adding that he credits the Beach House for making all the difference.

``We didn't expect the Beach House to become a destination,'' he said.

``We thought that people would already be here and it would be a nice place for them to come and refresh...but what has happened is that it has actually become a destination, a little like Disney would be in Orlando.''

Actually, perhaps not quite as famous a draw as the one Pepsi has going for it in Hungary where the rival soft drinks firm sponsors one of the biggest rock festivals in Europe.

The week-long ``Pepsi Island'' festival, held on an island on the River Danube at Budapest, attracts 250,000 young people every year to hear rock acts, ranging this year from Patti Smith to punk favourite Green Day.

Pepsi scored a major coup in 1995 by buying out the sponsorship rights to an existing ``Student Island'' rock festival that was short of funds.

Coke's own strategy gives an implicit nod to Pepsi by acknowledging that soft drinks consumers are likely to be won over in the heat of summer, though Garrison says the idea of linking a favourite Hungarian resort and a product is Coke's.

``The days of just sponsoring things, like the Tour deFrance... without an involving communication piece are over for us. Because this just works much better.''

The project costs two per cent of the company's budget and that does not include the cost of a massive summer advertising campaign, he added.

``It's cheap. People are blown away by that,'' he said.

``Two years ago we were neck and neck. Then we jumped out ahead.''

Coke does not release profit or revenue figures for local markets nor does Pepsi.

But Garrison said margins have increased since a price war two years ago.

``We were squeezed terrifically here in 1996 when there was a real price battle, but we have that behind us now,'' he said. ``As we built our brand we could take the price up to a premium.''

A two-litre bottle of Coke costs about 165 forints ($0.75), while a two-litre Pepsi container costs 155 forints.

While claiming victory in Hungary's cola wars, Garrison is not resting on his laurels.

An intense figure whose employees say never stops talking or thinking about Coke, Garrison admits to a ``religious'' passion for the product.

He aims to get Hungarians to drink 200 servings per year in two years' time, meaning he hopes to convince Hungarians to drink Coke even at breakfast.

``Hungarians eat sausage in the morning. Coca-Cola tastes great with all those sausages,'' he said.