Campaign Launched to Get Pepsico to Grant a Pepsi Franchise in Israel

Consumers who are buying Pepsi-Cola in Baltimore, Maryland, and in Richmond, Virginia, are getting more than just a soft drink. They are finding a postcard attached which they are urged to mail to Donald Kendall, chairman of the Board of PepsiCo, “requesting that he grant a Pepsi franchise in Israel.”

The drive was started by Morton Lapides, chairman of the Board of the Allegheny Beverage Co. in Baltimore, the fourth largest bottler of Pepsi-Cola products in the United States. Allegheny Beverage holds the franchise to bottle and sell Pepsi products in parts of Maryland, Virginia, West Virginia and Pennsylvania.

Lapides said he started his campaign three weeks ago because since July, 1982 he has been trying to contact Kendall to discuss Allegheny’s request to sell Pepsi in Israel. Instead, Lapides has received statements from other PepsiCo officials that a Pepsi franchise in Israel would not be profitable and that the State of Israel does not want Pepsi sold there.

SAYS ISRAEL WELCOMES PEPSI

But Lapides produced a letter from Meir Dayan, Israeli economics consul in Philadelphia, dated July 1, 1982 which said that Israel “would welcome your coming into Israel, building a plant based on a Pepsi-Cola franchise, and offering your product to the Israeli market.”

Lapides believes that his company “has the financial and technological resource to construct and operate a successful franchise” in Israel and “I am willing to back that statement by taking the necessary financial risks which are involved. “

Pepsi-Cola has an exclusive contract for selling cola drinks in the Soviet Union and also does business in many Arab states, Lapides said, among them Egypt, Jordan and Saudi Arabia. He believes that his card campaign can put public pressure on Kendall.

The cards, which say “Help Start a Pepsi Generation in Israel, ” are being put basically in Jewish neighborhoods, according to Jeffrey Sandman, a spokesman for Allegheny. But he said he believes non-Jews will also support the effort.

“If PepsiCo can permit franchises to exist in small areas in the United States, then certainly Israel, with more than 4,000,000 people, deserve a Pepsi franchise, ” the card to Kendall notes.

PEPSICO SAYS THERE IS NO BOYCOTT

A PepsiCo official said that although there is no Pepsi franchise in Israel the company was not participating in the economic boycott of Israel by Arab countries in which the Arab countries have blacklisted foreign firms doing business with Israel.

According to Cartha DeLoach, PepsiCo’s vice president of corporate affairs, “There is no boycott, it’s just a matter of pure economics. It’s not economically viable to establish manufacturing facilities for Pepsi-Cola in Israel at the present time. We’re not in many countries around the world for the same reason.”

PepsiCo officials have not make it clear why the company thinks it can’t make money in Israel. Coca-Cola has been selling its product in Israel since 1967 and says it has been making money but the market is not quite as profitable as Arab markets, where soft drink sales benefit from the Moslem prohibition on alcohol. Coca-Cola markets its product in a number of Arab countries, including Egypt.

When Coca-Cola first became available in Israel, the firm was put on the Arab boycott list. According to a company spokesman, that listing forced his firm out of a least one Arab country, Egypt. Coca-Cola returned to Egypt in 1979, after Egypt signed a peace agreement with Israel.

STATEMENT BY ADL

Abraham Foxman, associate national director of the ADL, said today: “We have recently been in contact with senior officials of PepsiCo, including a face-to-face meeting with senior vice president Nestor Corbonell and vice president Cartha DeLoach. We discussed the allegations concerning a role for Pepsi-Cola in Israel. PepsiCo set forth their arguments and we are checking into the whole situation. At this point we are not ready to make a judgement in the matter.”