Coca-Cola and Nestlé banned in Iran due to Israel ties

Tehran Bans Coca-Cola and Other Israeli-Connected Brands Amid Growing Boycott Pressure

The ban, announced by Tehran's City Council on Sunday, is part of the country's broader stance in support of the "Palestinian cause" and comes amid escalating inflation and economic pressure.

According to Mehdi Babaei, the head of the council's safety committee, the ban extends beyond mere advertisements. It will also prohibit the sale of these goods in municipality-run stores, fruit and vegetable markets, and will stop the procurement of these products by the municipality. The decision has been made to align with Iran’s ongoing opposition to Israeli-linked businesses and further isolate such companies from the local market.

In the coming weeks, further details are expected to be released, but sources have already indicated that the ban will target all municipal advertising spaces. Authorities have warned that severe penalties will be imposed on businesses found distributing the affected goods. This move is part of a broader trend seen across the Middle East, where tensions surrounding the Israel-Palestine conflict have led to a boycott of companies perceived to be connected to Israel.

The boycott movement has had a significant impact on global beverage brands, with market research firm NielsenIQ reporting a 7% sales decline in the first half of the year across Arab countries. Coca-Cola, which has long been a target of the boycott movement, saw a decline in sales, particularly in Egypt and Pakistan, with volumes dropping by double digits in 2024. Similarly, PepsiCo, another target of the boycott, also experienced minimal growth in beverage volumes across Africa, the Middle East, and South Asia.

Despite the claims of both Coca-Cola and PepsiCo that they do not fund military operations in Israel or any other country, their ties to Israel have made them vulnerable to pressure from the Muslim world. Coca-Cola, for example, faced a significant backlash when it opened a plant in Israel in the 1960s, leading to the Arab League blacklisting the company until the 1990s. This allowed Pepsi to dominate markets such as Egypt and Pakistan. PepsiCo later faced similar scrutiny after acquiring Israeli company SodaStream in 2018 for $3.2 billion.

This latest move by Tehran underscores the power of economic and consumer boycotts in the ongoing geopolitical conflict and highlights the challenges global brands face when their operations intersect with politically sensitive regions. As the boycott movement continues to gain momentum in the Middle East, companies like Coca-Cola and PepsiCo may find their operations increasingly under fire in countries aligning themselves with anti-Israeli sentiment.