How Coca-Cola Tried and Failed to Suppress a Boycott over Gaza

The Washington Post / John Hudson

14:23 JST, August 13, 2024

When sales of Coca-Cola began to plummet in parts of the Middle East and Asia this summer in response to boycotts of corporations with alleged ties to Israel, the soda company’s franchise in Bangladesh rolled out an expensive advertising campaign featuring a television star known for his roles in South Asian soap operas and reality TV.

The actor, Sharaf Ahmed Jibon, played a shopkeeper who assured customers that Coca-Cola was not an Israeli product and underscored the company’s ties to Muslim communities. “Even Palestine has a Coke factory,” he told a group of boys who then dropped their political objections and guzzled down bottles of the sugary beverage.

But there was a problem.

The so-called Palestinian factory is an Israeli-owned bottling company that operates on an Israeli settlement in East Jerusalem considered illegal under international law.

“As a global brand, we partner with local franchises to serve local communities. We acknowledge that the recent video missed the mark, and we apologize,” said Scott Leith, vice president for global strategic communication at Coca-Cola. “The video has been removed from all platforms.”

The incident underscores the perilous moment for American companies seeking to untangle themselves from the widespread anger over Washington’s military and political support for Israel’s offensive in Gaza.

Since Oct. 7, when Hamas-led militants killed more than 1,200 people in Israel and took more than 240 hostage, the Israeli military has killed more than 39,000 Palestinians, according to local health officials, and the country’s restrictions on access to humanitarian aid have created a famine in parts of Gaza.

U.S. megabrands such as Coca-Cola, McDonald’s, Starbucks and KFC all have experienced a decline in sales in regions that have had Gaza-related boycotts.

In February, shares of McDonald’s fell about 4 percent after the company reported that flagging sales in the Middle East contributed to it missing fourth-quarter revenue targets. In January, Starbucks reported quarterly earnings and revenue that fell short of Wall Street’s expectations because of “headwinds” that the company’s CEO, Laxman Narasimhan, said included the Gaza boycott.

The boycott against Coca-Cola derives from the decision of its franchisee the Central Bottling Company to operate out of the Atarot Settlement Industrial Zone in Israeli-occupied Palestinian territory, said Omar Barghouti, co-founder of Boycott, Divestment and Sanctions, a nonviolent activist movement opposed to Israel’s occupation.

That made the Coke advertisement’s promotion of a Palestinian factory particularly galling, Barghouti said.

“The company must think people of Bangladesh and possibly all Muslims are so gullible to fall for its botched, I dare say primitive, propaganda,” he said.

In the ad, set in a hot, bustling marketplace in Bangladesh, the shopkeeper boasts about Coke’s global appeal and says rumors that the soda comes from Israel are misinformation.

“Listen, guys, Coke is not at all from ‘that place,’” he says, without explicitly mentioning Israel.

“For the past 138 years, people in 190 countries have been drinking Coke. They drink it in Turkey, Spain and Dubai. Even Palestine has a Coke factory,” he says.

The misleading characterization of the factory sparked a furious backlash online and professional consequences for the advertisement’s actors.

“It added fuel to the boycott, and the actors involved in the advertisement received death threats,” Sadia Islam, a writer and director in the Bangladeshi film industry, said in an interview.

One of the actors, Shimul Sharma, issued a public apology, saying that “in the future” he would accept only projects that respect “human rights.”

The shopkeeper actor, Jibon, released a statement saying that the commercial was “only a part” of his “professional work” and that he has not “supported Israel in any way” and “never will.”

The regional Coca-Cola franchise in Bangladesh, already weathering a 23 percent drop in sales before the commercial aired, pulled the ad and terminated another one that had been shot but never aired as part of the same campaign.

Paul Argenti, a professor of corporate communication at Dartmouth University, said it was striking to see an international company such as Coca-Cola mishandle the incident so thoroughly.

“In sensitive situations like this, your facts have to be correct and your communication has to be airtight,” he said. “It appears that they believed they could get away with this kind of deception.”

Argenti acknowledged the company’s global footprint and decentralized franchise structure, but said it does not excuse the green-lighting of advertisements with easily disprovable facts.

“Coca-Cola was not strong enough in terms of pulling this advertisement as soon as they saw it, and they were way too slow in getting an apology out,” Argenti said. “Those are sins that a company like Coca-Cola, which is one of the best companies in the world, should not be able to get away with.”

The company’s misfortunes have created a boon for local competitors in different parts of the Muslim world, according to regional analysts.

“People are refusing to drink Coca-Cola, and local brands like Jordan’s Matrix Cola and Saudi Arabia’s Kinza have seen a surge in sales,” said Will Todman, a Middle East analyst at the Center for Strategic and International Studies.

“The only people I’ve seen drinking Coca-Cola were tourists,” said Todman, who has been traveling in the Middle East this summer examining the conflict’s impacts.

Even Western brands that have exercised more marketing discipline than Coke have suffered.

In Jordan, supermarkets have labeled local products to help direct boycotters away from foreign brands that have ties with Israel. Starbucks’s franchisee in the Middle East had to lay off 2,000 employees because of the boycotts.

“I’ve seen branches of Starbucks and McDonald’s completely empty in Morocco, Tunisia and Oman,” Todman said.

The rationale for the boycotts has varied depending on the company.

McDonald’s was targeted after its franchise in Israel sponsored a giveaway of thousands of free meals to Israeli soldiers. Starbucks came under fire after the coffee giant sued its own union, Starbucks Workers United, after the workers posted a message of solidarity with Palestinians under an account on X that uses the Starbucks logo.

Pro-Israel organizations such as the Anti-Defamation League have criticized the boycott, saying it is aimed at “eliminating the only Jewish state in the entire world,” said Marina Rosenberg, the group’s senior vice president for international affairs.

Barghouti denied the allegation, calling the campaign a “principled, strategic and effective boycott.”

In response to the boycotts, the companies have all stressed that they take no side in the fraught conflict.

Some of the franchises in Muslim-majority countries have taken more assertive action. In Qatar and Oman, McDonald’s franchises have donated to humanitarian relief efforts in Gaza, though they remain under fierce scrutiny from boycotters.

Ultimately, any company with a strong association with the United States is at risk, given Washington’s decision to provide Israel political support at international institutions and the vast majority of bombs and munitions dropped in the conflict, Todman said.

“Many citizens in the Arab world who are boycotting may not have detailed information about the companies’ exact ties to Israel,” he said. “Instead, I think people boycott the companies because they represent the United States, and they oppose U.S. support for Israel.”