The Coke Divide

True to form in the Mideast, Israelis and Palestinians choose between Coca-Cola bottled in Tel Aviv and in the West Bank.

April 18, 2004|By Peter Hermann | Peter Hermann,SUN FOREIGN STAFF

RAMALLAH, West Bank - The Coca-Cola bottles sold in the West Bank and Gaza come with labels written in Arabic and a promise that the contents are a "Palestinian production."

Bottles and cans of Coke sold in Israel have Hebrew writing and are stamped with a seal assuring customers that the popular drink meets the kosher dietary laws of the Jewish state.

In that small way, the front line of the Israel-Palestinian conflict extends even to products designed to make life a bit more pleasing. They reach even to grocery stores' shelves, where the origin of the Coke that people buy depends on who they are - Israeli or Palestinian, Jewish settler or Palestinian villager.

Israelis, in most cases, drink Coke bottled in a suburb of Tel Aviv.

Palestinians, in most cases, drink Coke bottled in Ramallah.

Each franchise is supposed to be restricted to serving its own set of customers on either side of Israel's pre-1967 border known as the Green Line. But business is far from that simple.

Coke trucks from each franchise cross into each other's territory daily. The Palestinian plant needs supplies from Israeli ports and warehouses; the Israeli plant has to deliver to Jewish settlements in the West Bank and Gaza.

The blurred border aids a small black market of private contractors who sell their products to merchants on opposite sides of the line. A Palestinian in Ramallah might sip Coke from a can with Hebrew writing, and an Israeli in Tel Aviv might drink from a can that spells Coke in Arabic.

Competing versions of the same product are readily available at a small Arab grocery store in East Jerusalem, hidden away on stockroom shelves. The owner, Imad Ghaith, said he drinks Palestinian Coke at home but acknowledges that most of his customers prefer the Israeli product, though it is more expensive.

"People think that the Israeli Coke is Western and therefore better than ours," Ghaith said. "They are the same. I think people are crazy."

Jorg Hartmann has spent the past two decades managing cigarette factories and distributors in conflict zones. He took over as general manager of Coke's Ramallah plant in April last year and describes the conditions he knew in Bosnia and West Africa as easier than those here.

His fleet of vehicles has to include trucks licensed for Israelis, who use yellow car tags; other vehicles licensed for Palestinians, who use green tags; and others for drivers who are Israeli-Arab, who can travel on Israeli roads. The licenses and permits are issued to specific pairings of trucks and drivers, and have to be renewed every few months.

Hartmann's counterpart in Tel Aviv, Ofer Yanku, general manager of Central Bottling Company, declined to comment about the difficulties. His spokesman, Paul Solomon, said only, "We try to stay away from the political situation."

Yanku and Hartmann report to managers at Coke's regional offices in Greece and Germany. Those managers, too, were reluctant to talk, saying in written statements that Coke was scrupulously neutral in the Israeli-Palestinian conflict, citing as evidence that "we are present in Israel and the Palestinian territories."

The Coca-Cola Co. began operating in Israel in 1968 in the Tel Aviv suburb of Bnei Brak, setting up a franchise called Central Bottling Co., which bottles Coke, Nestea, Fanta and Sprite. It employs about 2,000 workers, and until 1998 served Israelis and Palestinians.

The Arab League led a boycott of American products after the 1967 Arab-Israeli war, effectively banning distribution of Coke in Arab countries. The boycott lasted until 1990 but was extended for two years in the West Bank and Gaza. Palestinians drank a locally produced soft drink called Club Cola, which was made in the same plant that Coke uses in Ramallah.

The Palestinian Coke plant, called the National Beverage Company, opened in 1998 after an interim peace accord granted the Palestinian Authority autonomy over several West Bank cities and parts of Gaza. In addition to Coke, it produces Fanta and Sprite and employs 200 people. It is owned by a consortium of Palestinian businessmen led by Zahi Khouri, who took a chance that peace could lead to profit.

"There was a political agreement between two powers to end a conflict," Khouri said in a telephone interview as to why he chanced such an adventure. "The idea was to set up two economic entities. That is how one builds a nation."

"The Palestinians don't need faint business owners. They need bold ones," said Khouri, who divides his time between Jerusalem and Orlando, Fla., and owns a substantial interest in the dominant Palestinian communications and cellular telephone companies.

He said that two weeks before the United States invaded Iraq, men he described as "hoodlums" threw a firebomb at a Coke billboard in Ramallah. The next day, an Islamic group condemned the attack and praised Coke and other American companies in the West Bank.

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