Identifier
Created
Classification
Origin
06JERUSALEM4590
2006-10-20 12:20:00
CONFIDENTIAL
Consulate Jerusalem
Cable title:
PROBLEMS AT KARNI FORCING COCA-COLA TO SERIOUSLY
how-toVZCZCXYZ0000 OO RUEHWEB DE RUEHJM #4590 2931220 ZNY CCCCC ZZH O 201220Z OCT 06 FM AMCONSUL JERUSALEM TO RUEHC/SECSTATE WASHDC IMMEDIATE 5505 INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY RHEHNSC/NSC WASHDC PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RUEHBS/USEU BRUSSELS PRIORITY
C O N F I D E N T I A L JERUSALEM 004590
SIPDIS
SIPDIS
NEA FOR FRONT OFFICE; NEA/IPA FOR
WILLIAMS/SHAMPAINE/STEINGER; NSC FOR ABRAMS/DORAN/WATERS;
TREASURY FOR SZUBIN/LOEFFLER/NUGENT/HIRSON
E.O. 12958: DECL: 10/20/2016
TAGS: ETRD EINV PREL PGOV KWBG IS
SUBJECT: PROBLEMS AT KARNI FORCING COCA-COLA TO SERIOUSLY
CONSIDER CEDING GAZA
Classified By: Consul General Jake Walles, Reasons 1.4 (b) and (d).
C O N F I D E N T I A L JERUSALEM 004590
SIPDIS
SIPDIS
NEA FOR FRONT OFFICE; NEA/IPA FOR
WILLIAMS/SHAMPAINE/STEINGER; NSC FOR ABRAMS/DORAN/WATERS;
TREASURY FOR SZUBIN/LOEFFLER/NUGENT/HIRSON
E.O. 12958: DECL: 10/20/2016
TAGS: ETRD EINV PREL PGOV KWBG IS
SUBJECT: PROBLEMS AT KARNI FORCING COCA-COLA TO SERIOUSLY
CONSIDER CEDING GAZA
Classified By: Consul General Jake Walles, Reasons 1.4 (b) and (d).
1. (C) Summary: The chairman of the local Coca-Cola bottler,
Zahi Khoury, says the company is slowly giving up on Gaza
since it cannot get its West Bank-produced product into Gaza.
Khoury cautioned that there will be no new investment in
Gaza without credible guarantees that exports produced there
can be shipped out in a timely and predictable manner.
Khoury urged that any efforts to strengthen the Presidential
Guard (PG) must be done in such a way that the Palestinian
"street" will see and understand. End summary.
Coca-Cola cannot get its product
through Karni into Gaza
--------------
2. (C) Zahi Khoury, the Palestinian-American Chairman of the
National Bottling Company (NBC) which bottles Coca-Cola
products for the West Bank and Gaza, told the Consul General
October 20 that his company is slowly giving up on Gaza since
they generally cannot get their product in. He said that
profits the company makes in the West Bank are used to offset
its losses in Gaza. With Coca-Cola products mostly absent
from the market in Gaza, Khoury said that Mecca Cola is
flourishing. (Note: Mecca Cola was introduced into the
Palestinian market last year as an "Islamic" alternative.
End note.) Khoury said he could sell ten truckloads of
Coca-Cola products in Gaza in two days. According to Khoury,
NBC needs to ship 100 truckloads per week to maintain its
market share. (Note: NBC bottles its products in Ramallah
and ships them to Gaza through the Karni/al-Mintar crossing.
Mecca Cola bottles its product inside Gaza using raw material
shipped in from Israeli suppliers. NBC had plans to open a
bottling plant in Gaza but shelved those plans given its
inability to gain assurances about bringing in raw materials.
Anecdotal reports confirm that Israeli shippers are given
preference over Palestinian shippers for scheduling shipments
through Karni/al-Mintar. End note.)
No investment likely in Gaza without credible
guaranteed access to Karni for exports
--------------
3. (C) Khoury noted Israeli industrialist Stef Wertheimer's
interest in setting up industrial zones in Gaza. While he
likes Wertheimer's ideas and believes there is enough
Palestinian capital to invest in such an endeavor, Khoury
cautioned that few would be willing to invest without
credible guarantees that exports produced there can be
shipped out in a timely and predictable manner. He referred
back to the former Gush Qatif settlement greenhouses that the
Palestinian Investment Fund took over after Israeli's
disengagement and which suffered enormous losses due to the
inability to get the agricultural product out of Gaza. While
Khoury is aware of the United States Security Coordinator's
plans to strengthen security on the Palestinian side of
Karni/al-Mintar, he said he remained skeptical that it would
be enough for Israel to keep the crossing consistently open
for exports.
Street needs to see that Abbas strengthened
--------------
4. (C) Turning to politics, Khoury said that the "Palestinian
street," especially in Gaza, needs to see leadership linked
with strong power. If the United States and others are
focused on strengthening the Presidential Guard in order to
bolster President Abbas, Khoury said, then it needs to be
done in such a way that the "street" comes to realize that
the PG is a force to be reckoned with. He said that they
need more sophisticated training and equipment; only then
will there be progress on the ground there. Khoury said that
he was encouraging "younger" leaders to consider joining a
new government but that they were scared of the "guns in the
hands of militias in Gaza."
Comment
--------------
5. (C) While NBC's experience here is typical for
Palestinian firms, Coca Cola's prominence as an iconic
American product afforts it a much higher profile. Post
recommends that the USG make additional efforts to assist NBC
in moving its product to Gaza. End comment.
WALLES
SIPDIS
SIPDIS
NEA FOR FRONT OFFICE; NEA/IPA FOR
WILLIAMS/SHAMPAINE/STEINGER; NSC FOR ABRAMS/DORAN/WATERS;
TREASURY FOR SZUBIN/LOEFFLER/NUGENT/HIRSON
E.O. 12958: DECL: 10/20/2016
TAGS: ETRD EINV PREL PGOV KWBG IS
SUBJECT: PROBLEMS AT KARNI FORCING COCA-COLA TO SERIOUSLY
CONSIDER CEDING GAZA
Classified By: Consul General Jake Walles, Reasons 1.4 (b) and (d).
1. (C) Summary: The chairman of the local Coca-Cola bottler,
Zahi Khoury, says the company is slowly giving up on Gaza
since it cannot get its West Bank-produced product into Gaza.
Khoury cautioned that there will be no new investment in
Gaza without credible guarantees that exports produced there
can be shipped out in a timely and predictable manner.
Khoury urged that any efforts to strengthen the Presidential
Guard (PG) must be done in such a way that the Palestinian
"street" will see and understand. End summary.
Coca-Cola cannot get its product
through Karni into Gaza
--------------
2. (C) Zahi Khoury, the Palestinian-American Chairman of the
National Bottling Company (NBC) which bottles Coca-Cola
products for the West Bank and Gaza, told the Consul General
October 20 that his company is slowly giving up on Gaza since
they generally cannot get their product in. He said that
profits the company makes in the West Bank are used to offset
its losses in Gaza. With Coca-Cola products mostly absent
from the market in Gaza, Khoury said that Mecca Cola is
flourishing. (Note: Mecca Cola was introduced into the
Palestinian market last year as an "Islamic" alternative.
End note.) Khoury said he could sell ten truckloads of
Coca-Cola products in Gaza in two days. According to Khoury,
NBC needs to ship 100 truckloads per week to maintain its
market share. (Note: NBC bottles its products in Ramallah
and ships them to Gaza through the Karni/al-Mintar crossing.
Mecca Cola bottles its product inside Gaza using raw material
shipped in from Israeli suppliers. NBC had plans to open a
bottling plant in Gaza but shelved those plans given its
inability to gain assurances about bringing in raw materials.
Anecdotal reports confirm that Israeli shippers are given
preference over Palestinian shippers for scheduling shipments
through Karni/al-Mintar. End note.)
No investment likely in Gaza without credible
guaranteed access to Karni for exports
--------------
3. (C) Khoury noted Israeli industrialist Stef Wertheimer's
interest in setting up industrial zones in Gaza. While he
likes Wertheimer's ideas and believes there is enough
Palestinian capital to invest in such an endeavor, Khoury
cautioned that few would be willing to invest without
credible guarantees that exports produced there can be
shipped out in a timely and predictable manner. He referred
back to the former Gush Qatif settlement greenhouses that the
Palestinian Investment Fund took over after Israeli's
disengagement and which suffered enormous losses due to the
inability to get the agricultural product out of Gaza. While
Khoury is aware of the United States Security Coordinator's
plans to strengthen security on the Palestinian side of
Karni/al-Mintar, he said he remained skeptical that it would
be enough for Israel to keep the crossing consistently open
for exports.
Street needs to see that Abbas strengthened
--------------
4. (C) Turning to politics, Khoury said that the "Palestinian
street," especially in Gaza, needs to see leadership linked
with strong power. If the United States and others are
focused on strengthening the Presidential Guard in order to
bolster President Abbas, Khoury said, then it needs to be
done in such a way that the "street" comes to realize that
the PG is a force to be reckoned with. He said that they
need more sophisticated training and equipment; only then
will there be progress on the ground there. Khoury said that
he was encouraging "younger" leaders to consider joining a
new government but that they were scared of the "guns in the
hands of militias in Gaza."
Comment
--------------
5. (C) While NBC's experience here is typical for
Palestinian firms, Coca Cola's prominence as an iconic
American product afforts it a much higher profile. Post
recommends that the USG make additional efforts to assist NBC
in moving its product to Gaza. End comment.
WALLES