Coca-Cola Chairman Says Firm Will Not Yield to ‘So-Called’ Arab Boycott

Assurance that "the Coca-Cola Export Corporation has not and will not conduct its affairs in response to any boycott, and that includes the so called Arab boycott" was given here today by James A. Farley, chairman of the board of the corporation, in a statement issued to the press. Mr. Farley explained why his corporation refuses to give a franchise to an Israeli firm, and said that the experience with that firm precludes entering into a business agreement with it. The statement read:

"Certain allegations have been made regarding the Coca-Cola Export Corporation, the most damaging of which could be the assertion that the company is somehow unalterably opposed to giving a bottling franchise to an enterprise in Israel, thus supporting the Arab boycott. These charges are completely unfair and unfounded.

"For more than 25 years, I have been chairman of the board of directors of the Coca-Cola Export Corporation, following many years of public service and, for most of my life, have been a resident of the City of New York, a community of diverse nationalities. and religions and cultures. The simple facts should serve to answer such charges that are designed to appeal to peoples emotions rather than their good and fair judgment. The facts are these:

"1) The Coca-Cola Export Corporation has over the years taken into serious consideration requests by enterprises in new areas including Israel for franchises to bottle Coca-Cola. In the past years, one such request from a promising applicant has been approved, only to have the Israeli Government deny a permit to the applicant to commence operations. Subsequent applications have been rejected. The basic criterion for accepting or rejecting such requests have been whether, in the judgment of the company, the investment would be successful.

"2) These decisions are not permanent. The Coca-Cola Export Corporation assesses and reassesses the possibilities of establishing bottling operations in various countries, always taking into account local and economic and market conditions. It goes without saying that if, in certain locations, these conditions are found to have changed, the Coca-Cola Export Corporation has been more than willing for purely business reasons to change its decision.

"3) Insofar as Israel is concerned, the market conditions there have been considered repeatedly as they have been considered in other countries in the Middle East. Until now, the officials of the company have found no reason to alter earlier judgments with respect to the advisability of starting a new plant. If the situation changes, we certainly will consider changing our decision. It should be kept in mind that the Coca-Cola Export Corporation is not alone in assessment of the desirability of opening a bottling plant in Israel. No other American soft drink manufacturer, to our knowledge, has opened a bottling plant there.

"4) Finally, in connection with the recent allegation that Coca-Cola has rejected a franchise for an Israeli company, the most important fact should be kept in mind. The group from Israel which has most actively sought a bottling franchise from Coca-Cola is the Tempo Beverage Company. This company dominates the soft drink market in Israel and is well-entrenched in its field. In 1963, the Israeli courts found the Tempo Beverage Company guilty of infringement of the Coca-Cola trademark and bottle design. This unhappy experience with the subject company obviously precludes our entering into a business arrangement with it.

"I am deeply distressed by the charges that have been made against the company of which I have been chairman of the board for more than a quarter of a century. I think that it is unfair that such charges with their high emotional content should be made in defiance of the simple facts I have here outlined. I assure the public that the Coca-Cola Export Corporation has not and will not conduct its affairs in response to any boycott, and that includes the the so-called Arab boycott. "