Coca-cola Company Charged with Bowing to Arab Boycott of Israel

Issue was taken here today by the Anti-Defamation League of B’nai B’rith with the assertion of the Coca-Cola Company that it has refused to grant a franchise to an Israeli firm not because of political reasons but for economic considerations. In a statement analyzing all the facts involved, the Anti-Defamation League charged that the refusal of the Coca-Cola Company was motivated by “bowing to the Arab boycott” against Israel.

“Weighing all the factors at hand, in our view the conclusion is not unreasonable that the Coca-Cola Company has been concealing its real reason for refusing to grant a franchise to an Israeli bottler. The ADL statement said: “In light of all the evidence, including the reported statements of certain of its spokesmen, that reason, in our judgment, is political, not economic. On balance, we are forced to the conclusion that the Arab boycott is the likeliest reason for the position of Coca-Cola.”

The ADL statement concluded with a reference to three economic criteria allegedly set up by Coca-Cola for its refusal to grant a franchise, sought by Tempo Soft Drinks Co., an Israeli concern. These reasons reportedly were:

1) A company wishing a Coca-Cola franchise must make an investment of at least $1,000,000; 2) The franchised company must produce only Coca-Cola, and not any other soft drink; 3) Financial feasibility for a Coca-Cola franchise holder in Israel would not be successful.

“The three criteria,” stated the ADL, “are obvious nonsense, and not the real reasons for Coca-Cola’s denial of a franchise to the Israeli bottler. We are drawn to the reluctant conclusion that the Coca-Cola Company is collaborating.”

According to the ADL, there are 31 Coca-Cola bottlers franchised in the Near and Middle East. “The deducible facts seem strongly to indicate that, while submitting to the Arab boycott, “the ADL declared, “Coca-Cola assiduously attempted to camouflage its submission as a pure non-political, economic decision.”

The ADL noted that, in countries comparable in population to Israel’s, the minimum $1,000,000 investment has not been required of local Coca-Cola bottlers. It cited as an example a company in El Salvador that began Coca-Cola bottling operations in 1965 with a capitalization of only $200,000, and a Kuwait bottler who was granted a franchise in 1953, when its total original assets were only $280,000.

The Tempo firm in Israel, on the other hand, was shown through Dun & Brad-street reports to have a net worth of $500,000. Tempo owns a bottle plant which, alone, is expected to have a net worth of $1,750,000, the ADL stated. The League cited Tempo’s vast success as a marketer of soft drinks in Israel, asserted that Tempo was willing to market Coca-Cola under that brand name, and declared: “Market feasibility was obviously measured (by the Coca-Cola Company) by different standards for Arab countries.”