PepsiCo and Coca-Cola have one month to remove all 300ml cans from stores, restaurants and hotels or face severe fines.
Distributors of the two brands met officials from the Consumer Protection Department yesterday and agreed to stop producing the 300ml cans.
"We met with the companies who agreed to remove the 300ml cans from the market," said Hashim Al Nuaimi, the head of consumer protection at the Ministry of Economy. "There will be no fines now" unless the deadline is not met.
Mr Al Nuaimi did not specify the level of fine that would be imposed if a 300ml can were sold.
This week the department had accused PepsiCo and Coca-Cola of cheating consumers by reducing the size of their cans and selling them at the same price.
But distributors said the 300ml cans had been sold in the market for some time, but only to restaurants, hotels and leisure establishments that dictated the price. Hypermarkets, supermarkets and convenience stores only sold 355ml cans of Pepsi and 330ml cans of Coca-Cola for Dh1.5, the distributors said.
Dubai Refreshments distributes Pepsi in Dubai and the Northern Emirates; Abu Dhabi Refreshments distributes it in Abu Dhabi; and Al Ahlia Gulf Line distributes Coca-Cola throughout the country.
All cans will now have to be 355ml for Pepsi and 330ml for Coca-Cola, even if they are sold in restaurants and hotels, and both must display a Dh1.5 price tag.
Pepsi and Coca-Cola increased their retail prices in January last year for the first time in 20 years, from Dh1 to Dh1.5 for a can.
Both companies blamed the increase on inflation, rising petrol and salary costs, and a steep rise in sugar prices.
Mr Hashim said this week: "Pepsi and Coca-Cola violated rules when they reduced the size of the Dh1.5 can from 355ml to 300ml and removed the price tag.
"What Pepsi and Coca-Cola did was unacceptable fraud and cheating because the two companies illegally reduced the size and maintained its price.
"In other words, they simply increased its price in violation of the consumer protection laws."