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SodaStream chief hails $3.2 billion sale to PepsiCo as victory over BDS

In interview with Channel 10 news, Daniel Birnbaum also criticizes Netanyahu’s government for policies toward minorities, gay couples

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Scarlett Johansson with Sodastream's Daniel Birnbaum (photo credit: Mike Coppola/Getty Images for SodaStream/via JTA)
Scarlett Johansson with Sodastream's Daniel Birnbaum (photo credit: Mike Coppola/Getty Images for SodaStream/via JTA)

SodaStream CEO Daniel Birnbaum, who has entered an agreement to sell the maker of home seltzer machines to US food and beverage giant PepsiCo Inc. for $3.2 billion, said the deal represents a victory over the Boycott, Divestment and Sanctions movement, which aims to isolate Israel internationally.

Birnbaum’s firm had become a target of the pro-Palestinian campaign over the location of its factory in the West Bank, before moving to a location inside the Green Line several years ago.

“Who is BDS?” Birnbaum said dismissively, in an interview with Channel 10 news on Monday night, hours after the sale was announced.

“I think they have learned not to meddle with us. Look at what happened to SodaStream that they targeted, and what has happened to them,” he said.

In October 2014, SodaStream announced it would close its West Bank factory in Maale Adumim and move to southern Israel, a move the BDS movement claimed was a result of its pressure.

The BDS movement asserted that SodaStream discriminated against Palestinian workers and paid some less than Israeli workers. SodaStream said the opposite — that it provided work for hundreds of Palestinians on the same terms as Israelis.

Illustrative: A Palestinian worker speaks with his Jewish employee at the SodaStream factory in the Mishor Adumim industrial park, February 2, 2014. (photo credit: Nati Shohat/Flash90)

Some 500 Palestinian employees lost their jobs at that time. Israel gave the remaining 74 employees permission to enter the country and continue to work for SodaStream.

In addition, American actress Scarlett Johansson came under fire by the BDS movement regarding her role as the first-ever brand ambassador of the Israeli company, which included her acting in an ad screened during the SuperBowl.

Johansson rejected the criticism, and described the firm as “building a bridge to peace between Israel and Palestine.”

SodaStream, founded in 1991, makes and sells seltzer machines for home use. The foot-and-a-half-tall machines turn still water into seltzer in 30 seconds. The company also markets dozens of mix-in flavors, such as cola, ginger ale, lemon-lime and fruit punch. Its 3,500 employees produce about 500,000 devices per month, which are sold in 46 countries around the world.

On Monday, Birnbaum and PepsiCo CEO Ramon Laguarta hailed the $3.2 billion deal, with Birnbaum describing the fact that PepsiCo will leave operations in Israel in place for at least 15 years as an “entrance,” rather than an exit.

SodaStream CEO Daniel Birnbaum (l) and PepsiCo’s CEO Ramon Laguarta at the SodaStream factory in Israel’s Negev Desert next to the city of Rahat on August 20, 2018. (Eliran Avital)

SodaStream will remain an independent unit within PepsiCo, with its headquarters in Israel and maintaining its own brand, led by Birnbaum. The deal will uncap opportunities for massive growth for SodaStream, Birnbaum said in an interview with The Times of Israel earlier on Monday.

The $3.2 billion purchase saw the US beverage giant continue its efforts to contend with falling demand for sugar-laden soft drinks, especially sodas. SodaStream makes machines that carbonate home tap water. The acquisition also is a pitch to consumers concerned about mounting waste from soda cans and plastics in landfills around the world, since SodaStream employs reusable bottles.

In the Channel 10 interview, the CEO, who employs Israeli Jews, Arabs, Palestinians, and Bedouins in SodaStream’s manufacturing plants, also expressed criticism of some of the policies of the Israeli government, regarding its minorities and the rights of the LGBT community.

The government of Prime Minister Benjamin Netanyahu has come under internal and international pressure for passing the Nation State Law in July, which declares Israel to be the national home of the Jewish people, but omits Israel’s commitment to equality for all of its citizens.

Netanyahu also voted against legislation that would have extended surrogacy rights to male same sex couples, two day after publishing a video explaining his support for the idea.

Birnbaum said that he cannot but notice things “that are happening in our country,” like the “missing sentence” in the Nation State Law.

“How hard is it to give some recognition,” to minorities in the population, he asked in the Channel 10 interview. “Why?”

Companies and CEOs should not be afraid of expressing their thoughts on the matter, he said.

“Everyone must express their opinion, with courage, and if you have any doubt if this is good or bad for your business, look at SodaStream,” he said.

Last month, SodaStream sent gift packages themed on LGBT households to Knesset members as a protest against the lack of surrogacy rights for same-sex male couples.

This is not the first time Birnbaum has expressed criticism of Netanyahu and his policies. In a 2016 interview with The Times of Israel, the head of SodaStream accused the prime minister of cynically and deliberately nurturing the conflict with the Palestinians “in all its evil manifestations,” and called him “the prime minister of conflict,”

Israel is expected to gain some NIS 1 billion ($274 million) to its coffers from tax revenue from the deal, Channel 10 said.

AFP contributed to this report.

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