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

KARACHI/CAIRO/NEW YORK: Coca-Cola and rival PepsiCo spent hundreds of millions of dollars over decades building demand for their soft drinks in Muslim-majority countries including Egypt to Pakistan.

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. And across the Middle East, Pepsi’s rapid growth evaporated after the Gaza war started in October.

Pakistani corporate executive Sunbal Hassan kept Coke and Pepsi off her wedding menu in Karachi in April. She said she didn’t want to feel her money had reached the tax coffers of the United States, Israel’s staunchest ally.

“With the boycott, one can play a part by not contributing to those funds,” Hassan said. 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 7 percent 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 percent of the soft drinks category, founder Kassim Shroff told Reuters this month. Before the boycott, the figure was closer to 2.5 percent.

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 Britain. 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.

Many consumers shunning Coca-Cola and PepsiCo cite US support of Israel over decades, including in the current, ongoing war with Hamas.

“Some consumers are deciding to make different options in their purchases because of the political perception,” PepsiCo CEO Ramon Laguarta told Reuters in a July 11 interview, adding that boycotts are “impacting those particular geographies” such as Lebanon, Pakistan and Egypt.