After Longterm Arab Boycott, Coke Now the Target of Zionist Group’s Protest

By Marc Perelman

Published March 16, 2007, issue of March 16, 2007.
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For decades, the Arab world blackballed Coca-Cola over the company’s decision to enter the Israeli marketplace. Now, the oldest Zionist organization in the United States is calling for a boycott of the beverage maker.

The Zionist Organization of America is accusing Coca-Cola of “antisemitic and immoral conduct” regarding a bottling facility in Egypt that the government there seized from a Jewish family, the Bigios, in the 1960s. “Until the Bigios’ case is justly and fairly resolved, we urge all Americans and all others of good will to refrain from purchasing any of Coca-Cola’s products,” the ZOA said in a statement.

The Bigios, who now live in Canada, sued Coke in a federal court in New York in 1997, asking for damages. The company has petitioned the Supreme Court, arguing that the claim should be heard in an Egyptian court.

“The Coca-Cola Company is appalled by statements linking us to any anti-Semitic act,” the company said in a statement to the Forward. “The Company does not tolerate discrimination of any kind and we do not support or oppose governments, nor political or religious causes. We live and work in more than 200 countries and have deep roots in communities around the world.”

Coke, which has been engulfed in the Arab-Israeli dispute since the 1960s and is currently fighting criticism over its labor practices in Colombia and Turkey and its environmental record in India, is among a growing number of multinational corporations being sued in American courts by foreign plaintiffs for actions committed abroad.

Noting that the Atlanta-based beverage giant describes itself as a “corporate citizen of the world,” and has adopted a “code of conduct” requiring it to “act in every instance with honesty, integrity, accountability and respect,” the ZOA asserts that Coca-Cola has been “unfairly and immorally benefiting from a campaign of antisemitism against the Bigios.”

The family leased its land and factory to Coca-Cola for more than a quarter of a century until the Egyptian government seized the property in 1962 and transferred it to a state-controlled entity. The Egyptian government decreed in 1980 that the property should be returned to the family, but the order was never carried out. In 1993, Egypt decided to privatize the entity. Upon learning that Coca-Cola intended to bid on the property, the Bigios contacted the company to protest and to ask for compensation. The company rejected their offer and purchased 42% of the entity, eventually forming a joint venture, according to the lawsuit filed by the Bigios in federal court.

In an e-mail to the Forward, Coke asserted that it “has never had, and currently does not have[,] any ownership interest in the property at issue in the litigation.”

“The Coca-Cola Bottling Company of Egypt, in which a Company subsidiary has minority interest, leases the property from an Egyptian state-owned insurance company,” the company said in a statement. “The Coca-Cola Company feels strongly that this lawsuit is not proper, and to the extent litigation is necessary to resolve ownership issues, it should take place in Egypt.”

The Bigios say that they filed a dozen lawsuits in Egypt to recover their property or receive compensation, but their efforts were repeatedly dismissed. In 1997, they sued Coca-Cola in a federal district court in New York. After a district court agreed with Coke’s argument that the case should be dismissed on technical grounds, the court of Appeals for the Second Circuit ruled that the family’s complaint was actionable in the United States, siding with the family’s argument that they would not receive a fair hearing in Egypt due to the past rejections of their claims and the hostile climate there. After the court rejected Coke’s petition to rehear the case, the company asked the Supreme Court to review the case on jurisdictional grounds.

This is not the first time that Coke faces accusations of antisemitism and threats of a boycott. In 1966, Jewish groups accused the company of staying out of Israel to avoid a potential Arab boycott. The company, which had until then argued that the market in Israel was too small, reacted by announcing the opening of a bottling factory in Tel Aviv. The Arab countries decided to boycott the company in 1968, prompting its competitor PepsiCo Inc. to jump in and, in turn, incur criticism in Israel and in the United States. The Arab boycott of Coke ended in the early 1990s.

A campaign called “Stop Killer Coke” has been trying to call the company to account in Colombia for the alleged cooperation provided by some of the company’s plant managers to paramilitary squads accused of murdering a number of union leaders. Coca-Cola has denied the allegations and agreed to an independent probe by the International Labour Organization. Last October, a federal judge in Florida dismissed a lawsuit filed in 2001 on behalf of the Colombian union on the grounds that the charges against Coke bottlers were impermissibly vague.

Still, several student groups here and abroad have called for a boycott of the company because of the Colombian controversy, as well as over alleged anti-union practices in Turkey and overuse of water resources in the Kerala region in India. Coke has denied all those allegations.

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