PepsiCo Inc and Unilever (China) Ltd, a unit of Anglo-Dutch firm Unilever, have formed a 50-50 joint venture to produce Lipton's iced tea for the burgeoning mainland bottled tea market, the China Daily reported.

The paper quoted unidentified company executives as saying the joint venture company will use PepsiCo's bottling facilities and distribution networks and Unilever's famous tea brand and recipe.

China's "ready-to-drink" tea market - estimated to be worth 10 bln yuan a year - has been dominated by two Taiwanese companies Master Kong and Uni-President, the paper said.

But this year Nestle Group and Guangdong-based Jianlibao entered the lucrative market.

PepisCo and Unilever will produce two types of black tea, which accounts for 60 pct of the bottled tea market, the paper said.