Plaintiff contends that “the prior action against A & P should not work as a collateral estoppel’ to the present action. ...” because of an alleged lack of identity of parties, identity of issues and mutuality of estoppel.
 In Light Co. v. Insurance Co., 238 N.C. 679, 691, 79 S.E. 2d 167, 175 (1953) it is stated:
“Generally, in order that the judgment in a former action may be held to constitute an estoppel as res judicata in a subsequent action there must be identity of parties, of subject matter and of issues. It is also a well established principle that estoppels must be mutual, and as a rule only parties and privies are bound by the judgment. These rules are subject to exception.”
Logic and precedent mandate that this case be an exception to the general rule that identity of parties and mutuality of estoppel exist as a prerequisite to a plea of res judicata. As *548stated in Crosland-Cullen Co. v. Crosland, 249 N.C. 167, 170, 105 S.E. 2d 655, 657 (1958):
“Public policy demands that every person be given an opportunity to have a judicial investigation of the asserted invasion of complainant’s rights .... But public policy is equally as adamant in its demand for an end to litigation when complainant has exercised his right and a court of competent jurisdiction has ascertained that the asserted invasion has not occurred, (citation omitted)
To make the plea effective it is necessary not only that the party have an opportunity for a hearing but that the identical question must have been considered and determined adversely to the complaining party.” See also 47 N.C. Law Rev. 690 (1969).
 Thus the question before us is whether the requisite identity of issues exists between plaintiff and defendant in the present case and between plaintiff and A & P in the former case.
In both cases, plaintiff premises his theory of liability on an alleged breach of the implied warranty of merchantability, G.S. 25-2-314. The warranty of fitness, either express or implied, is contractual and the contract extends no further than the parties to it and their privies. Tedder v. Bottling Co., 270 N.C. 301, 154 S.E. 2d 337 (1967). “[P]rivity to the contract is the basis of liability,” Tedder, 270 N.C. at 304, 154 S.E. 2d at 339.
In Tedder, privity, sufficient to support plaintiff’s claim of alleged breach of implied warranty, was found in “the manner in which the Pepsi-Cola was advertised and traveled from the bottler to the plaintiff.” Tedder, 270 N.C. at 306, 154 S.E. 2d at 340. In 4 Wake Forest Intra. L. Rev. 169, 179 (1968), it is stated:
“The theory of liability applied by the court [in Tedder] . . . was that an implied warranty is communicated to the consumer by the method in which the product is advertised and traveled from the bottler to the eventual consumer. It was held that the implied warranty attached through the representations made by the bottler in its manner of advertisement.”
*549In its answer, defendant admits that it is “in the business of filling, processing and selling to retail stores bottles of . . . ‘Coca-Cola’ and ‘Sprite’ ....”, that A & P is “one of its customers,” and that “ ‘Sprite’ and ‘Coca-Cola’ bottled drinks are advertised extensively by various persons and corporations, and to some extent by the defendant.” Clearly privity of contract between plaintiff and defendant is shown by the manner in which the soft drink was advertised and traveled from the bottler to plaintiff. It is also clear that the implied warranty of merchantability applies equally to both the retailer and the manufacturer of goods. Tedder; Gillispie v. Tea Co.; Official Comment 2 to G.S. 25-2-314.
In the prior action against A & P, plaintiff had ample opportunity for a judicial investigation of his asserted rights and the identical issue was considered and determined adversely to him. “Where both of these factors exist, sound public policy dictates that the court should refuse permission for further litigation on that question.” Crosland-Cullen Co., 249 N.C. at 170, 105 S.E. 2d at 657.
For the reasons stated, the judgment of the trial court is
Judge Morris concurs.