Israeli group threatens to sue Coca-Cola over Palestinian partner

Israel Law Center says it’ll pursue legal action if soda giant doesn’t sever ties with BDS-supporting Zahi Khouri

Marissa Newman is The Times of Israel political correspondent.

Zahi Khouri, founder and chairman of National Beverage Company (Courtesy: Coca-Cola publicity)
Zahi Khouri, founder and chairman of National Beverage Company (Courtesy: Coca-Cola publicity)

An Israeli advocacy group on Monday threatened legal action against Coca-Cola if it did not sever ties with its Palestinian subsidiary, whose owner has expressed support of the Boycott, Divestment and Sanctions (BDS) movement against Israel.

Shurat HaDin — the Israel Law Center said comments by Palestinian-American businessman Zahi Khouri backing a boycott of Israeli companies violates the soda company’s own internal policies.

“This letter is a warning to the Coca-Cola Company that it should rescind its franchise agreement with the Palestinian National Beverage Company, headed by Zahi Khouri, who openly advocates for BDS against Israel,” said a letter from the Israel Law Center to Mr. Mukhtar Kent, CEO of Coca Cola.

Khouri penned two op-eds in favor of the BDS movement — one in the Orlando Sentinel in 2014, and another in The Hill in May. In his Sentinel column, Khouri wrote that “the nonviolent efforts of BDS advocates make sense as a means to force Israel to recognize that the occupation is not cost-free.”

In its letter Monday, the Israel Law Center’s Nitsana Darshan-Leitner and US attorney Robert Tolchin argued that calls for a boycott violate the Anti-Racism Convention, as well as various state and federal laws. It also represents a breach of Coca-Cola Company’s own Code of Business Conduct, it claimed. The company’s ethics code, which the law center said binds its foreign subsidiaries as well, states, “The Company also must abide by US anti-boycott laws that prohibit companies from participating in any international boycott not sanctioned by the US government.”

Nitsana Darshan-Leitner, chairwoman of Shurat HaDin -- Israel Law Center (Courtesy Shurat HaDin)
Nitsana Darshan-Leitner, chairwoman of Shurat HaDin — Israel Law Center (Courtesy Shurat HaDin)

The BDS movement “is inherently racist, anti-Semitic, biased and prejudicial and has an extremist agenda that unfairly singles out Israel and Jews. The BDS movement’s goal is solely the destruction of the State of Israel and its Jewish community. It masquerades as a human rights movement, but it is singularly fixated on Israel and Jews and ignores egregious human rights abuses that do not feed its anti-Israel agenda,” the Israeli NGO representatives wrote.

The Israeli group also referenced a recent firestorm that erupted when Orange telecom CEO Stephane Richard indicated his company would sever its ties with its Israeli subsidiary, Partner. Richard apologized profusely for the move, condemned boycotts against the Jewish state, visited Israel and met with Prime Minister Benjamin Netanyahu, but remained evasive as to the telecom giant’s future investment plans in Israel.

“As the French telecom-services firm Orange recently made clear, the Coca-Cola Company should also make clear that it will not support any kind of boycott against Israel,” the letter said.

Khouri is the founder of the Ramallah-based Palestinian National Beverage Company, which produces and distributes Coca-Cola in the West Bank. The company was set to open a soda plant in the Gaza Strip in 2015, “which represents a $20m investment and will create 120 direct jobs while supporting a further 1,200 indirect jobs throughout our value chain,” according to Coca Cola’s website.

“Today, Coca-Cola employs 400 associates across three Palestinian bottling plants in Ramallah, Jericho and Tulkarem and seven distribution centers, and our business supports a further 4,000 Palestinian households through retail and across our supply-chain. We are proud to be the country’s third largest employer and fifth largest investor,” it said.

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