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Coke and Pepsi boycott over Gaza lifts Muslim countries' local sodas

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Now, both face a challenge from local sodas in those countries due to consumer boycotts that target the globe-straddling brands as symbols of America, and by extension Israel, at a time of war in Gaza. In Egypt, sales of Coke have cratered this year, while local brand V7 exported three times as many bottles of its own cola in the Middle East and the wider region than last year. In Bangladesh, an outcry forced Coca-Cola to cancel an ad campaign against the boycott. She said she didn't want to feel her money had reached the tax coffers of the United States, Israel's staunchest ally. Instead, she served her wedding guests Pakistani brand Cola Next. She is not alone. While market analysts say it is hard to put a dollar figure on lost sales and PepsiCo and Coca-Cola still have growing businesses in several countries in the Middle East, Western beverage brands suffered a seven per cent sales decline in the first half of the year across the region, market researcher NielsenIQ says. In Pakistan, Krave Mart, a leading delivery app, has seen local cola rivals like Cola Next and Pakola soar in popularity to become about 12 per cent of the soft drinks category, founder Kassim Shroff told Reuters this month. Before the boycott, the figure was closer to 2. Shroff said Pakola, which is ice-cream soda flavoured, made up most of the purchases before the boycott. He declined to provide figures for Coca-Cola and PepsiCo sales. Consumer boycotts date back at least as far as an 18th century anti-slavery sugar protest in UK. The strategy was used in the 20th century to fight apartheid in South Africa and has been widely wielded against Israel through the Boycott, Divestment and Sanctions movement. Volumes of Coke sold in Egypt declined by double-digit percentage points in the six months ended June 28, according to data from Coca-Cola HBC, which bottles there. In the same period last year, volumes rose in high single digits. In response to a Reuters request, PepsiCo said neither the company 'nor any of our brands are affiliated with any government or military in the conflict. Employees were unharmed, he said. Khouri said boycotts were a matter of personal choice but didn't really help Palestinians. In the West Bank itself, he said, they had limited sales impact. The big soda companies are no stranger to pressure among the Muslim world's hundreds of millions of consumers. After Coke opened a factory in Israel in the s, it was hit by an Arab League boycott that lasted until the early s and benefited Pepsi for years in the Middle East. Coke still lags Pepsi's market share in Egypt and Pakistan, according to market research firm GlobalData. In recent years though, Muslim-majority countries with young, rising populations have provided some of the soda giants' fastest growth. PepsiCo had similar gains, according to securities filings. He declined to share volume figures. Restaurants, Karachi's private schools association and university students have all taken part in anti-Coca-Cola actions, eroding goodwill built through sponsorship of Coke Studio, a popular music show in Pakistan. Exports of Egyptian cola V7 have tripled this year compared to , founder Mohamed Nour said in an interview. Nour, a former Coca-Cola executive who left the company after 28 years in , said V7 was now sold in 21 countries. Sales in Egypt, where the product has only been available since July , were up 40 per cent, Nour said. Paul Musgrave, an associate professor of government at Georgetown University in Qatar, warned of long-term damage to consumer loyalty due to boycotts. In Bangladesh, Coke launched advertising showing a shopkeeper talking about the company's operations in Palestine. After a public outcry over perceived insensitivity, Coke pulled the ad in June and apologised. In response to a question from Reuters, the company said the campaign 'missed the mark. The ad made the boycott worse, said one Bangladeshi advertising executive, who declined to be named because he was not authorised to speak to the media. Other American brands seen as symbols of Western culture, such as McDonalds and Starbucks, also face anti-Israel boycotts. Market share for global brands fell four per cent in the first half of in the Middle East, according to NielsenIQ. But the protests have been more visible against the widely-available sodas. As well as boycotts, inflation and economic turmoil in Pakistan, Egypt and Bangladesh eroded consumers' buying power even before the war, making cheaper local brands more appealing. Last year, Coke's market share in the consumer sector in Pakistan fell to 5. Coca-Cola and its bottlers, and PepsiCo, still see the countries as important areas for growth, particularly as Western markets slow down. Coca-Cola's bottler in Pakistan said to investors in May that it remained 'positive about the opportunity' the world's fifth most-populous country offers, and that it invested in the market with a long-term commitment. In recent weeks, PepsiCo reintroduced a brand called Teem soda, traditionally lemon-lime flavoured, in the Pakistani market, a spokesperson confirmed. The product is now available in a cola flavour with 'Made in Pakistan' printed prominently on the label. The companies are also still injecting the Coke and Pepsi brands into the fabric of local communities by sponsoring charities, musicians and cricket teams. Those moves are key to Coke and Pepsi keeping a toehold in the countries long-term even as they face setbacks now, Georgetown's Musgrave said. A corner store salesman carries Pepsi drinks as he delivers them to his customer in Isa Town, Bahrain, Aug 30, Israel's government did not respond to a request for comment. Historical targets The big soda companies are no stranger to pressure among the Muslim world's hundreds of millions of consumers. Now, both are losing ground to local brands. Bangladesh backfire In Bangladesh, Coke launched advertising showing a shopkeeper talking about the company's operations in Palestine. Future plans Coca-Cola and its bottlers, and PepsiCo, still see the countries as important areas for growth, particularly as Western markets slow down.

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